Circular Economy

– Sustainable Materials Management

A COMPENDIUM BY THE INTERNATIONAL INSTITUTE FOR INDUSTRIAL
ENVIRONMENTAL ECONOMICS (IIIEE) AT LUND UNIVERSITY
EDITORS
Philip Peck
Jessika Luth Richter
Kelly Delaney

CONTRIBUTING AUTHORS
Carl Dalhammar
David Peck
Dmytro Orlov
Erika Machacek Faigan
Jeroen Gillabel
Jessika Luth Richter
Julia Nußholz
Karl Vrancken
Katherine Whalen
Konstantinos Modis
Leonidas Milios
Maria Messing
Nancy Bocken
Naoko Tojo
Panos Davris
Philip Peck
Saskia Manshoven
Sophie Sfez
Thomas Lindhqvist
Yuliya Voytenko Palgan

A PUBLICATION BY:
The International Institute for Industrial Environmental Economics (IIIEE) at Lund University.

PROJECT PARTNERS
IIIEE at Lund University; Delft University of Technology; GEUS the Geological Survey of Denmark and Greenland; Ghent University,
NTUA the National Technical University of Athens, and VITO – with Höganäs AB and Swerea IVF.

This activity has received funding from European Institute of

Innovation and Technology (EIT), a body of the European Union,
under the Horizon 2020, the EU Framework Programme for Research
and Innovation.

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Preface
SOME PEOPLE work with the circular economy every day ... but many of us still have questions!
A simple question that we often hear is what is the circular economy? These and other important
questions will be addressed throughout this compendium, which complements the Massive Open
Online Course, Circular Economy: Sustainable Materials Management. You can access the course
at www.coursera.org/learn/circular-economy.

As a starting point, consider the following related to the “what” question above.
• Have you ever wondered why so many people believe the circular economy is important?
• How is it linked to the function of natural resource production systems?
• Why is the circular economy so important for developing countries?
• How will it benefit society?

Other questions we think are important are related to how do we go about it?
• How can business, industry and society move the circular economy forward?
• What are the technologies involved?
• What issues and incentives motivate businesses?
• How do companies make money in the circular economy?
• Can policy and politicians help the circular economy?
• Does society have to change?

Please read on to find out more!

We have structured this compendium to closely follow the MOOC, and intend that this will serve as an
aid to your understanding of the course and as a ready reference source describing many aspects of the
circular economy and sustainable management of materials.
IV Circular Economy | scope for circular economy: sustainable materials management
Scope for Circular Economy:
Sustainable Materials Management
This compendium document describes the first steps of a journey towards circularity. The
journey will be different for all countries of the world, but this text is intended to share
knowledge so that many more of us can create a path forward.
The scope of the compendium covers many parts of the
emerging circular economy. We choose to place considerable
focus on some of the substances that we extract from the
ground – in particular raw materials and critical materials.
We focus on circularity in these areas, because presently
we use too much, too fast, and we are not re-using nearly
enough. In turn, this approach demands that we look at
the technologies that rely on such materials, and how
businesses are innovating to make circularity of materials
a reality.
This document provides many concrete examples of what
we mean by sustainable materials management. We present
cutting edge insights on a range of topics.
• Why raw material supply chains are important to society?
• How circularity can benefit us?
• Where changes in our economies are required?
• Who needs to be involved?
• What businesses are doing to make the circular economy
a reality?
• How governments and regulators can support the circular
economy?
At the start of every subsection in this compendium we
provide a brief Highlights summary. Here we synthesize the
take home messages of each lesson presented throughout
the MOOC.
For this introductory section, our highlights appear as
follows:
• Key challenges arising as a result of the excessively
high material and energy consumption – and the way
we eject large proportions of material as waste to
the environment – demand that we pursue a circular
economy.
• Damage to natural systems and shortages of key re-
sources – both renewable and non-renewable – will
negatively affect the development of less wealthy
countries unless we achieve a circular economy.
• The creation of a circular economy is about much more
than resource flows. It is also about circular product
design, business models, and policy formulation. These
must be interlinked with social changes to evolve a
circular society.
Why do we need a circular economy and how do we
pursue it?
Governments and businesses are becoming increasingly
concerned about the growing pressures on our global
resources due to human activities. Our economies, and
our systems of production and consumption, are stressing
and damaging Earth’s natural systems. We use enormous
amounts of raw material and energy to create the billions of
products that sustain our lives. At the same time, we send
huge volumes of waste into the very atmosphere, waters,
land and ecosystems that are vital to our existence. The richer
we are, generally, the more we pollute.
An overarching challenge is that billions of people in less
developed countries have the same right to live long and
comfortable lives as people in developed countries. This
 scope for circular economy: sustainable materials management | Circular Economy
is directly linked to becoming wealthier. But if everyone
consumes resources, and emits wastes, at the level that
developed countries do at present, then our planet will simply
be unable to meet the demands placed upon it.
The underlying problem lies with our linear economies
– these have excessively high material and energy con-
sumption, and eject large proportions of material as waste.
Something has to change! One thing we can do, is to make
our economies much more circular – so that we achieve more
using less. Advances are needed in many areas to achieve a
circular economy – and a picture of what a circular economy
is, or could be, is becoming clearer as more practical real-life
examples emerge.
Generally, strategies can be seen as seeking to keep
resources and products at as high a value as we can, for as
long as possible, and extending their lifetimes so that they
function for longer.
To demonstrate how a circular economy can be developed,
this document showcases many of the ways that society
works towards the slowing, narrowing and of course, closing,
of resource flows. Importantly, the creation of a circular
economy is about much more than resource flows. It is also
about developing and implementing strategies for circular
product design, business models, and policy formulation.
And it is interlinked with evolving our norms and behaviour
to build a circular society.
What are the benefits of a circular economy?
The circular economy can help us do much more, with much
less. It can help reduce the burdens on the Earth caused by
our material and energy consumption. It can help protect
ecological goods and services from the pollution and wastes
we generate.
It can also help us limit our overall demand for resources
per capita so that there are enough for the wellbeing of
all. Many countries are still developing, and they need the
resources to do so. The circular economy can help ensure
that we secure enough resources for our societies to function
and develop.
Achieving a circular economy needs the engagement of
society. And it will need plenty of invention and innovation.
It will also require the creation of new forms of business;
V
new technologies and processes, and new forms of govern-
ance. Such changes offer the potential to generate value
to society; for example, via stimulation of employment and
an increased demand for educated and skilled workers. This
evolution also needs new thinking, new social systems, new
forms of engagement, and new institutions. This demands
an evolved society.
Exploring five areas of the circular economy
This compendium describes five important areas that need
work as we look to the future and achievement of a circular
economy to replace the linear economy that dominates today.
Chapter 1 explores where metals and other key materi-
als come from, and outlines some of the key arguments
for why society needs more circularity.
Chapter 2 presents circular business models and show-
cases a range of ways for business to create economic
and social value.
Chapter 3 introduces you to circular design. Here you
will explore topics such as functional materials and
ecodesign; methods to assess environmental impacts,
and networks where best practices can be shared.
Chapter 4 provides details of why policy is important
for progress towards the circular economy. It explores
where we need help from governments, and how policy
interventions can enable the circular economy.
Chapter 5, our final chapter, then allows you to examine
aspects of circular societies. You will learn of things like
new social norms, forms of engagement, systems, and
institutions that are needed by the circular economy.
You will also explore how individuals can help society
become more circular.
VI Circular Economy | scope for circular economy: sustainable materials management
Table of Contents
Preface ................................................................................................................................ III
Scope for Circular Economy:
Sustainable Materials Management ............................................................... IV
Materials
1.1 WHAT IS MINING?......................................................................................................... 2
1.2 SUSTAINABLE MINING................................................................................................. 5
1.3 FROM MINING TO METAL............................................................................................ 6
1.4 VALUE AND GOVERNANCE.......................................................................................... 7
1.5 CRITICALITY ................................................................................................................. 9
1.6 TRANSITION TO A CIRCULAR ECONOMY ..................................................................11

Circular Business Models

2.1 THE ROLE OF BUSINESS IN THE CIRCULAR ECONOMY............................................. 15
2.2 CIRCULAR ECONOMY BUSINESS MODEL STRATEGIES............................................ 18
2.3 BUSINESS MODEL INNOVATION................................................................................ 24
2.4 DRIVERS FOR ENTREPRENEURSHIP IN THE CIRCULAR ECONOMY.......................... 25
2.5 BARRIERS FOR BUSINESSES IN THE CIRCULAR ECONOMY...................................... 28

Circular Design, Innovation and Assessment

3.1 MATERIAL SCIENCE INNOVATIONS............................................................................ 31
3.2 ECODESIGN STRATEGIES............................................................................................ 32
3.3 NANOTECH DEVELOPMENTS..................................................................................... 33
3.4 ASSESSING THE ENVIRONMENTAL SUSTAINABILITY
OF CIRCULAR SYSTEMS: TOOLS AND METHODS........................................................... 36
3.5 ASSESSING THE RESOURCE EFFICIENCY OF CIRCULAR SYSTEMS........................... 41

Policies and Networks

4.1 THE HISTORICAL PERSPECTIVE.................................................................................. 51
4.2. POLICIES FOR A CIRCULAR ECONOMY.................................................................... 54
4.3 EXTENDED PRODUCER RESPONSIBILITY................................................................... 59
4.4 ECODESIGN POLICIES................................................................................................. 62
4.5 POLICY OUTLOOK...................................................................................................... 63
4.6 NETWORKS AND INFORMATION SHARING.............................................................. 64

Circular Societies
5.1 CIRCULARITY’S VALUE TO SOCIETY.......................................................................... 69
5.2 ENVIRONMENTAL IMPACTS OF CONSUMPTION...................................................... 70
5.3 THE GLOBAL VIEW...................................................................................................... 74
5.4 WHO OWNS IT?.......................................................................................................... 77
5.5 THE LOCAL VIEW ....................................................................................................... 78

References ....................................................................................................................... 83
1
1 Circular Economy | materials

Materials
 materials | Circular Economy 2

Materials are mined, transformed and used throughout their life cycle within various po-
litical, societal and business contexts. This section covers the basics of the material supply
chain, including its social, environmental and economic consequences, and explores how
the original form of materials management is reimagined in a circular economy model.

1.1 WHAT IS MINING?
• Mining has many steps along its life cycle and each of
these has different sustainability implications.
• Mining and minerals processing operations can take
many forms and these differ depending upon mineral,
metal, ore-type or mining location.
• Mine sites and minerals processing facility activities
– and their wastes – must be carefully managed to
prevent environmental degradation or negative social
implications.
What, when and where?
We use many non-renewable raw materials in our society.
These include metals, like iron and gold, fossil fuels such
as coal and lignite, and ornamental stones like marble and
granite. All of these raw materials are extracted by different
forms of mining.
However the extraction, use and recycling of raw materials
is not a new thing. In fact, we have mined for thousands
of years to obtain metals and minerals that we use to
make products crucial for the survival of humanity. The
development of human societies through the Bronze Age
and the Iron Age has even been described according to those
products of mining that defined the key technologies of the
time. Some manner of recovery and recycling has also always
been performed. Some materials are inherently suited for
circularity and have always been considered too valuable to
throw away. But this was not the case for all materials, and
even today, the average recycle rate recorded is not as high
as it could – or should – be.
Mines are located where mineral-rich ores are located!
Sometimes they are far away in remote places, and
sometimes they are close to places where many people live.
The Avlayakan open-pit gold mine in the Russian Far East is
an example of a remote mine – it’s more than a thousand
kilometres from the nearest town. Many cities and towns
were actually started as places of mining, and there are
often communities attached to mines. The town of Lavrion
in Greece, got its start due to mining some 5000 years ago.
Exploration and extraction
There is a lot of work to be done before a mining operation
actually begins extracting minerals. The very first step in
mining is the search for mineral deposits. For thousands of
years, humankind has looked for ore bodies to mine. And this
search has led them far into remote areas, and essentially to
every part of the globe.
Exploration includes a number of steps, from examining
a geological map, to site investigations, non- destructive
geophysical surveys, and of course drilling holes into the
ground to find and define how big and how valuable the
deposit is. Exploration activities can last years and cost
millions of dollars. An important issue is that even before
the creation of a mine, this process of looking for minerals
also has the potential to result in significant environmental
3 Circular Economy | materials

or social impacts. For example, access roads can open up

KEY TERMS
sensitive areas to human exploitation, and test pits can
Minerals are composed of the same substance through-
disrupt ecosystems. It is important that such issues are also out and there are more than 3000 different minerals
given consideration. in the world. Minerals are made of chemicals – either a
After mineral exploration has found a promising mineral single chemical element or a combination of chemical
elements.
body, and depending on the value of the minerals, a model of
the sub-surface is developed, and this model is used to figure Rocks are made up of two or more minerals. For exam-
ple, the rock called granite is a mixture of the minerals
out which parts are economically viable to mine. Then a mine quartz, feldspar, and biotite.
design and a plan to extract the minerals can be developed.
Ore is a mineral or an aggregate of minerals from which
Ideally the mine plan should meet all the three objectives of a valuable constituent, especially a metal, can be prof-
sustainability: economic viability, environmental protection itably mined or extracted.
and societal support.
A mine can be deep underground with only small surface
entrances (for example when the deposit extends to great
depth), or it can be an open pit if the deposit is very close to
or reaches the surface. Sometimes such mining pits are so
big that they can be seen from space (Fig. 1.1).
Such a large operation of course has the potential to cause
many impacts on ecological and hydrological systems, and
on the stability of the landforms. Because of this, the mine
plan must also address issues like the protection of flora and
fauna, water resources, geotechnical stability and so forth.
It is very important that such aspects be considered at the
design stage.
Once a mineral deposit has been developed into an actual
mine, mining typically involves the extraction of huge
volumes of rock or soil. For example, in a large iron ore mine,
annual production can total tens of millions of tonnes per Figure 1.1. Sidewall of a large open pit copper mine.
year. At times, very large volumes of waste rock must also be
moved to access the ores that contain the minerals that we
want (Fig. 1.2).
Once mineral ores are extracted, mining companies
process ores to separate the valuable minerals.
This often starts with physical processes such as crushing,
grinding, and a sieving process called screening. After this,
other physical and physicochemical separation methods are
applied based on differences in properties such as specific
gravity, magnetism, or colour (Fig. 1.3, next page). Thus, a
concentrate of the valuable recovered minerals is produced.
This is typically a mineral powder that contains the mineral
that we want at concentrations that are suitable for
subsequent technologically and economically feasible
chemical or metallurgical processing.
The concentrate or metal is then transported to places
where it’s smelted or further refined, or both. Smelting aims
to treat the concentrate and recover the contained metal,
and refining is used to further improve the quality of
produced metals and remove any remaining impurities. Figure 1.2. An unprotected waste rock stockpile of approxi-
mately 120 million tonnes polluting a stream.
Mining’s footprint
For many mineral ores, the concentrate may be just a tiny deposits. These must be properly planned for, managed and
fraction of the ore. Very large volumes of ore and rock then remediated when mining is finished.
are often excavated, processed and then placed in waste Waste rock and tailings constitute most of mining-related
management areas around a mine site for every small portion wastes. The extra rock and material that was dug out to
of concentrate produced. Thus it is no surprise, that we often access the ore is often referred to as waste rock. Tailings are
talk about the large footprint of mines; a mine may create materials of little or no economic value that is left over when
large, physical voids in the ground, as well as large waste we have extracted the desirable mineral from the ore. They
 materials | Circular Economy 4

Figure 1.3 Flotation process to obtain metal concentrate.

are generally a fine sandy material produced when the original
ore is ground so that the mineral of interest can be extracted in
the concentration stage. These residuals are usually deposited
close to the site of mining in a tailing management facility. In
many instances mine wastes can be used to fill the holes that
are made by mining – a good mine design may have this as a
key objective, as it can both reduce the footprint of the mine
and reduce risks to the environment.
Over decades, the price of many metals and minerals
have increased or new, improved processes for extracting
minerals from ores have been developed, or both. With these
advances, there are many tailings deposits that can now be
profitably recycled and reprocessed to recover the residual
minerals/metals. Hence, many old tailing deposit sites have
now become mines again!
Post closure use of the site also needs to be considered.
Mining is an activity related to the development of
mankind and ideally would follow the needs of society, not
only regarding a secure supply of raw materials but also a
commitment for environmental protection. So, to minimize
the footprint of mining, environmental protection measures
have to be incorporated in the whole life-cycle of the mine,
all the way from initial exploration to the closure of the mine
(Fig. 1.4).
Exploration
CONCEPTUAL
CLOSURE
PLANNING
Pre-feasability

Mine life cycle Feasability

All mining operations have a life cycle. This spans from
exploration, through mine development and operation, to
Construction
closure. Very importantly, this also includes the use of the
Operations
post-mining site. The planning and design work for mining
Stakeholder input
Mine life cycle

must consider much more than just the economic viability

of a mine during its operational life. Careful management is
INCREASING
required to protect ecosystems and society from the potential DETAIL

negative impacts of mining, and this requires the consistent

DETAILED
compliance of the principles of sustainability at all stages. In CLOSURE
particular, the design of and application of land reclamation PLANNING
works, and ongoing management routines, is needed to Decommissioning
make sure that the quality of the natural and manmade Transition to closure
Closure
environment remains protected during the mine’s life cycle.
For example, soils and water need to be carefully Post closure
considered. The protection of soil and water quality close to
the mine is very important to sustain agricultural activities Relinquishment
during and after the mining operations and to maintain a
clean supply of drinking water for neighbouring communities. Figure 1.4. Mine Closure Planning. [1]
1.2 SUSTAINABLE MINING
• A set of boundary conditions must be achieved to align
mining with sustainability principles.
• Communities and their socio-economic well-being are
central to the pursuit of sustainability in mining.
• Fundamental physical and chemical issues must be
considered in order to achieve environmental perfor-
mance that can be considered sustainable.
Boundary conditions for sustainable mining
Throughout the history of mining all the way up to about
the 1960s, there was little or no consideration of its
environmental and social consequences. Many parts of the
world still bear the unsustainable legacies of pollution and
disturbed land as a result. But since then, there has been an
ever-increasing awareness of the environmental and social
liabilities that can be caused by mining.
While many legacy problems remain, a great deal of
remediation has been performed, and this work continues
today. Leading mining firms and international organizations
now know how to prevent problems, and they share
such knowledge freely. Governments, regulators and civil
society have also learned how to challenge industry to keep
improving.
A prime goal for sustainable mining is to achieve four
ground conditions:
• maximize socio-economic benefits;
• minimize adverse socio-economic impacts;
• ensure that environmental resources are not subject to
physical and chemical deterioration;
• achieve after-use for the site that is beneficial and
sustainable in the long term.
So-called sustainable mining has certainly not been achieved
around the world. But, a number of leading countries do
support operations that meet these precursor conditions.
Lessons from such activities need to be spread, entrenched,
and improved upon everywhere if we are to achieve a global
norm for sustainable mining.
Communities and mining
A mine is often a core component of a community. This is
especially so when mining is conducted in remote areas or
less-developed countries, where they are commonly some of
the first true industrial endeavours to deliver vital income. In
these situations, mines are often the foundation for economic
development, as well as for achievement of sustainable
development goals. Even many advanced countries rely
significantly on mining.
Therefore, it is very important to consider social, socio-
economic, developmental, and inter-generational issues.
Countries pursuing sustainable mining must develop and
enforce innovative regulations for mining practices that reflect
both present and future expectations for environmental and
human health protection.
Mining companies and governments must consider how
communities grow around a mine. And governments must
ensure that the wealth generated by mining is transparently
managed, invested for the future of the country, and fairly
distributed among the present generation.
However, we should never forget – essentially all mineral
deposits eventually run out! This means that miners and
governments must plan for what will happen to communities
after the mine is gone. This requires that the land use for the
mine area is beneficial to the community and sustainable
for the long term – and that social and economic structures
remain in place to support communities.
Such issues must extend from the pre-mine planning
phase, through construction, mining, and mine closure to
post-mine stewardship. This requires an inter-generational

time frame. Companies that practice sustainable mining plan
many years in advance for what happens to communities, as
well as the role of communities in the use or protection of
land after the mine is gone.
Environmental constraints
A baseline requirement for environmental sustainability is that
the management policies, field practices and technologies
applied in mining reduce environmental harm to within
ecological limits. At the same time, land must be preserved
as a repository for biodiversity and for natural ecological
services. With such conditions in mind, there are a number
of fundamental physical and chemical issues that must be
considered in order to achieve environmentally sustainable
mining.
• Rocks and ores are often not at equilibrium when brought
to the surface. They can become chemically and physically
unstable when exposed to surface conditions and may
release eco-toxic substances. Unless planned for, prevented,
or contained, such processes can cause damage that lasts
for very long periods of time.
• Mine development often occurs on undisturbed land.
When a mine is opened in some areas, access to nearby
sensitive or undisturbed areas by other groups – for
example loggers or farmers – may not be compatible with
overall sustainable land use. For such reasons, access to a
mining area may be restricted, and authorities may opt to
not develop a town or public access roads. Such strategies
can help ensure that valuable natural systems are protected
for future generations.
• Mineral ore bodies are finite and all mines reach the end of
their viable life at some time. Therefore, sustainable mining
requires planning from the very beginning that guides both
the mining activities and the closure of the mine site. A
mine and all its wastes must be constantly managed, and
then rehabilitated and prepared for after-mine life. The final
landforms, hydrology and management strategies for the
mine areas must ensure that environmental resources are
not subject to physical and chemical deterioration in the
long term.
1.3 FROM MINING TO METAL
• Form, quality and value transform as ore is processed
to metal and then metal to marketable products.
• There is growing demand for metals and society needs
both metal recycling AND primary metal production.
• The value of metals increases as their engineering
material properties are enhanced.
Metals and other raw materials are essential to our global
economy and our social development. But how do we go
from mining to metals? After mining, a certain sequence
of processing steps is needed to upgrade raw materials to
produce marketable products.
materials | Circular Economy 6
Depending on their properties, their areas of application,
or even their scarcity, metals are placed in different categories
such as non-ferrous, base metals, technological, precious
metals, or even critical metals. No matter the category, all of
these metals are essential for the production of the high tech
devices and engineered systems that modern society relies
upon. Each of these types of metals have their own mining
and processing sequences, and their own systems that deliver
the products – either in a raw form or as refined versions.
This is called the supply chain.
Engineers have learned how to work with materials in
supply chains, and a metal supply chain consists of both
upstream (mining and refining operations) and downstream
(smelting, casting, and metal working) processing. Mining
and metallurgical engineers guide the processing of raw
materials into metals, which can then be mixed with other
elements to provide special additional properties. This is
called alloying.
At each step the value of the material increases due to
investment of time, effort and energy. From a scientific point
of view, each step increases the cumulative energy input that
has been needed for metal production. From an economic
perspective, at each step the product cost increases.
Case Study – Aluminium
Aluminium is a light-weight and durable metal which mixes
well with other elements and is thus used in a vast array
of products and applications. These include transport,
construction, packaging, electronics and electricity
transmission, among others. Aluminium can also be recycled
repeatedly – meaning that much of the economic value in
the metal can be preserved for each cycle (Fig. 1.5, next page).
The chain of activities called primary aluminium production
starts with the mining of bauxite ore. Then chemical refining
follows to extract pure aluminium oxide – called alumina. The
alumina is then smelted to primary aluminium. After this,
production of alloys takes place.
Finally, the metal is formed by a rolling and extruding
processes, or cast into moulds and then machined to final
products. And at the end of the product life, aluminium scrap
can be collected and recycled.
It takes four tonnes of bauxite ore to produce just one
tonne of pure aluminium. The investment of energy, work
and materials needed to achieve this is reflected in the
market value. Consider the base value of raw bauxite ore
of around 40€ per tonne; this amount increases to nearly
400€ per tonne for alumina. After smelting, the aluminium
metal has an even higher value – around 2000€ per tonne.
For many applications, further value adding may take place
– for example, special aluminium alloys used in aircraft
components are much more expensive than the aluminium
foil that we use in the kitchen.
Aluminium also has a highly developed recycling system,
because the recycling process requires only about 10% of the
total energy used in primary production. This makes it both
economically and environmentally attractive. Unsurprisingly,
global aluminium recycling rates are high: approximately 95%
7 Circular Economy | materials
Bauxite ore Recycling
40€/tonne
4 tonnes
Al2O3
380€/tonne
90 % energy
Refining
2 tonnes
Aluminium
2000€/tonne
Smelting
and alloying
Figure 1.5. Aluminium value chain.
for transport and construction applications, and about 60%
for beverage cans. As an example, more than 90% of the
aluminium used in a car is actually recycled into new products
when a car has reached its end of life. It’s estimated that nearly
75 % of all aluminium ever produced is still in use today!
Even though society obtains a lot of aluminium from
recycling – the system to produce this is called secondary
aluminium production – global demand for aluminium is
constantly increasing. This means that we still need to rely
on primary aluminium production to provide more than
two-thirds of our aluminium demand. So even if we could
recycle all of the aluminium we use, we would still need
primary production. Very important to note is that this
need for primary production will continue to grow to meet
global demand, and global demand is expected to increase
(essentially) for as long as countries develop. This is true for
almost all important metals, like copper, steel, and zinc.
The future of mining – both primary and secondary
resources
There is strong global demand for materials to meet the needs
of growing populations and the development of countries.
That means that we will need production and supply systems
for many decades to come.
While material recycling is a key aspect for achieving
sustainable development, we must still rely on our primary
resources. But this doesn’t mean that traditional mines are
the only type of mines. Many of the metals that society has
discarded can be “mined” in the future. The concept of
urban mining of landfills, or electronic waste stockpiles, has
emerged to capture this untapped mining market. The same
metallurgical processing steps used during primary production
can also be applied to these types of secondary resources.
End use products
Al scrap
Machining
reduction
Semi fabrication
1 ton Metal forming
However, even though industrial production of many
metals is well developed, engineers and scientists still have a
large amount of work to do in order to improve and optimize
the processes we use to extract metal from both primary and
secondary resources. As such processes are improved, then the
viability of solutions such as urban mining will improve also.
1.4 VALUE AND GOVERNANCE
• The complexity of global material-/supply-chains
makes it difficult to trace the actors, the processes to
transform materials, and transfer between geograph-
ical areas.
• We need to understand why and how materials flow,
and how this benefits the different partners if we are
to make our economies more circular and resource-
efficient.
• Global value chain analysis – an approach that focuses
on the coordination and control mechanisms of the
supply chain has emerged as a way to better under-
stand global flows of materials and value.
Global value chain analysis
Materials are transformed throughout their lifecycle. Minerals
are mined and processed for use in manufacturing of
intermediate components, then assembled into products that
are sold for final use. At the end of life, when products can
no longer be used and consumers dispose of them, ideally
they are collected and recycled so that the material can be
reintroduced into the material lifecycle.
All of these transformation steps, or segments, are linked
in supply chains. Very often we simplify material supply chains
down to a basic model with boxes and arrows. In reality,

supply chains are complex, non-linear, multidirectional and
interconnected. The complexity of supply chains makes them
challenging to trace; it’s hard to see exactly who is part of a
supply chain and what they do.
When analyzing a supply chain, it’s important to pay
attention to what is flowing from one segment to another.
While we have materials flowing, there is also money moving
from one segment to the next as the materials are sold
and bought. The process of identifying and then drawing
up which segments are part of a particular supply chain is
called mapping. In essence, supply chain mapping helps us
define the boundaries of the analysis: it details the processes
and actors that are part of the transfer of materials and
the processes to convert raw materials into more valuable
products, also termed transformation here.
It’s also important to consider where the transformation
processes take place. Are they specific to particular regions
or nations, or are they undertaken across many regions or
nations throughout a global value chain? The geographical
focus is important because access to labour, energy, capital
or land varies significantly between regions, and has a huge
impact on costs. Laws and regulations also vary greatly
between countries, and this can impact how and why
materials flow in a particular way.
Despite efforts to map actors and links between
transformational processes, or segments in and across
particular geographical areas, supply chain analysis cannot
explain all the outcomes of trade. Difficult to answer
questions remain such as: why some nations seemed to
gain relatively more from trading than others? To explain
this discrepancy, Gary Gereffi and Michael Korzeniewicz
developed an approach called global value chain analysis. [2]
This focuses on coordination and control mechanisms – also
materials | Circular Economy 8
described as the governance of the supply chain. In other
words, in addition to focusing on what is flowing in a supply
chain, we look at the transactions and governance structures
linking segments.
Governance arises from the transaction between a buyer
and a supplier as they are coordinating and controlling the
exchange. So it’s important to remember that any value
visible in the form of traded materials, services or monetary
exchanges is the outcome of a negotiation. Governance
describes how this negotiation affects the buyer and the
supplier; for example, one partner might be better off than
the other due to the conditions or characteristics of the
transaction.
Focusing on these transactions enables us to answer
why and how materials flow between segments in a global
value chain, and what outcomes these transactions have for
the different parties involved. These answers are important
when determining the “winners” and “losers” of material
flows and trade.
The why and how is Important
When we try to make our economy more circular and
resource-efficient, answering why and how materials flow
becomes crucial. First, this information allows us to better
understand the social circumstances related to the material
flows, and thus to reconnect materials with their human
coordination and control mechanisms. In simple terms it helps
us to explore the decision-making processes behind materials
entering and circulating in our economies.
Second, it allows us to see value for what it is: a moving
target. Value arises not only from the physical attributes of
a material but also from the perspectives of different actors,
such as buyers and suppliers. Such actors negotiate their values
9 Circular Economy | materials

between themselves, but within the larger context of a system
of actors at local, regional, national and global levels. All of these
factors influence how the value of a material is constructed.
1.5 CRITICALITY
• Raw material supply security has been central to eco-
nomic systems since early civilization and the modern
concept of critical materials arose in the 1930s.
• Perceptions of criticality based on the economic impor-
tance and supply risk of materials has become more
pressing as global trade, and the material complexity
of products, has drastically increased.
• Enhancing supply security for critical materials by re-
ducing, reusing, recycling and remanufacturing is an
important driver for the circular economy.
Mineral raw materials are essential components of all national
economies, and complex decision-making processes define
whether exploration or mining for minerals take place.
Among other things, countries must first decide if they
look for important materials within their territories. Then
depending on the outcome, the financial viability, and the
willingness of populations to accept industrial activities such
as mining, they must decide if they mine for it. Or whether
they source it from another country. Such issues have
important implications for security of supply.
Raw material supply security has been central to
economic activity since early human civilization, and
therefore discussed throughout history. This has become
even more important as products have become more
complex. The number of elements from the periodic table
that are used to make some of our contemporary products
has increased tremendously. For example, several hundreds
of years ago, you could build a windmill with stone, wood,
iron and textiles. Today we use hundreds of materials to
produce all the different parts of a modern wind turbine
(still in essence a windmill!). These include components such
as rotor blades of carbon-fibre plastics, rare earth magnets,
a multitude of cables, and highly advanced sensors and
electronic control systems. These compositional changes
allow, among other benefits, for more efficient energy
generation (Fig. 1.6).
Understanding the complexity of material access
Raw materials are thus important for many reasons. Raw
materials can contribute to technological and economic
development that seeks to improve quality of life. Raw
materials are also important for industries that are part of and
feed into segments of the global value chain. For example,
metal and alloy producers feed materials via component
suppliers into the global value chain for a wind turbine – even
if they are not direct suppliers. So, the links and impact of
raw material access is much more complex and goes much
further than just the next customer.
Some elements, like copper, zinc or gold, have been in use
for a long time and we have a good understanding of how
to find and trade them on an open market. Other elements,
such as rare earth elements, are not traded on open
exchanges, but instead mostly in direct business-to-business
transactions. This makes accessing them, and information
about their trade, more challenging.
Knowing where and how to access materials, which is
important for our economies, is an issue addressed by the
concept of critical materials. Bridging the challenges of
accessing particular elements and judging their criticality was
first taken up in the late 1930s in the United States. A discussion
of critical materials emerged when the issue of raw material
supply became related to the politics of national security.
At that time, the US government authorized stockpiling of
materials for national defense to mitigate potential supply
risks. During the 1970s and 80s, amidst two periods of oil
crisis that combined with relatively high commodity prices, the
political discussion about criticality was revived.

Pd Rh Ta Te U Ru

In K Li Nb P Re

Pt Si Th Ti V Pt Si Th Ti V Ge

Sn W Sn W Mg Mo Ni Sn W Mg Mo Ni Ga

Cu Mn Pb Cu Mn Pb Co Cr Cu Mn Pb Co Cr Cd

C Ca Fe C Ca Fe C Ca Fe Al REE C Ca Fe Al REE Ag

1700 1800 1900 2000

Figure 1.6. The growing material complexity of technologies. [3]

 materials | Circular Economy 10

Criticality
In recent years, the US began to consider non-energy
minerals as critical, defining a critical mineral as “one which Non-critical materials Critical materials
is subject to supply risk”. In Europe, the European
Commission also acknowledged that many of its member (high vulnerability
& high supply risk)
states had high levels of import dependency on metals used

Supply risk
in high-tech applications. In recognition of this, the
Commission launched a European Raw Material Initiative
that seeks to address such issues. Here, their experts defined
critical raw materials according to “their economic value and
Non-critical materials Non-critical materials
high supply risks”. They visualize raw material criticality in a
two-dimensional illustration. This has supply risk (“the risk
of a disruption to supply of the material”) on the vertical axis
and a measure of vulnerability and economic importance on
the horizontal axis (Fig. 1.7).
Supply risk is derived by examining the extent to which Vulnerability/Economic importance
the supply of raw materials is concentrated in a particular
Figure 1.7. Raw material criticality matrix.[4]
country. This occurs jointly with an examination of the
governance performance and trade aspects of the country. materials could contribute both to reducing supply risks and
For example, when determining EU import reliance, which is to shaping a circular economy.
the extent to which the EU is dependent on imports of raw Economic importance describes how important a material
materials, both the global suppliers and the countries from is for the EU economy. This importance is measured in terms
which the materials are sourced are investigated. The supply of end-use applications and the value added to the relevant
risk parameter focuses on the segment of the global value EU manufacturing sectors. An assessment of economic
chain where a high supply risk for the EU is detected. This importance is conducted by examining a so-called substitution
could be, for example, the extraction of the raw material. index, which looks at the technical and cost performance of
A focus on reducing, reusing, recycling and remanu- substitutes for individual applications. Such data is usually
facturing, and to some degree substitution, of the critical derived from the EU’s statistical database (Eurostat).

5 LREEs (Light Rare Earth Elements)

HREEs (Heavy Rare Earth Elements)

Antimony

Phosphorus
Magnesium
4
Bismuth

Niobium
Borate
3 Scandium
Supply risk

Natural graphite
PGMs (Platinum Group Metals)
Indium Beryllium

Bauxite
2 Germanium
Tungsten
Helium Cobalt
Vanadium
Baryte
Sapale wood Gallium
Fluorspar
Hafnium
Lithium Silicon Phosphate rock
Natural cork Natural rubber
1 Coking coal metal Tantalum
Rhenium Manganese Chromium
Tellurium Molybdenum
Natural teak wood Tin Iron ore
Magnesite
Feldspar Pothash
Silver Sulphur
Kaolin clay Aluminium
Perlite Gypsum Talc Diatomite Zinc Selenium
Bentonite Nickel
Silica sand Titanium
Gold Aggregates Copper
Limestone Lead
0
0.0 0.5 3.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5

Economic importance
Figure 1.8. EU criticality assessment 2017. [5]
11 Circular Economy | materials
It’s important to consider at least three time periods for
adjustment related to raw material criticality: the short-,
medium- and the long term. Within all of these periods,
access to a particular raw material could be restricted for a
variety of different reasons.
The EU criticality assessments have been conducted three
times so far: in 2011, 2014, and 2017. In the latest assessment,
61 candidate critical raw materials were examined, of which 26
were assessed as critical. For example, tungsten was assessed
to be of high economic importance but with a relatively low
supply risk, while both light and heavy rare earth elements
were identified as having lower economic importance but high
supply risk, and magnesium was determined to be both high
in economic importance and supply risk (Fig. 1.8, previous page)
The criticality assessment also provides insights from
a global perspective on which countries have the largest
supply share of a particular raw material (Fig. 1.9, next page).
Countries seek to understand their dependence on raw
material imports and material criticality in order to support
public and private decision-making, build resilience against
a material’s potential supply restriction and, if required,
address potential impacts.
1.6 TRANSITION TO A CIRCULAR ECONOMY
• A product perspective instead of a material perspec-
tive is critical to achieving closed-loops where the com-
plexity and functionality of a product is conserved.
• Product design, circular business models and a circular
policy context are key enablers for circular economy.
• A society-wide transition to a circular economy requires
changes to the way we live our lives with action at all
levels of society.
Stepping from a materials perspective to a transition
perspective
Up to this point, this compendium chapter has focused on
issues and topics immediately connected to materials and
the extraction of materials. It has been presented that these
activities remain vital (critical!) to the function of our modern
economies, but it has also been shown that Circular Economy
efforts will serve to reduce impacts related to the delivery of
materials to global value chains.
For each portion of the material value chains that has been
addressed, an explicit link has been drawn to how one can
embed activities that align with the Circular Economy. Further,
a number of lessons have detailed how materials increase in
value (quite drastically!) as they move up value chains. Consider
aluminium that went from ore to fabricated products with
orders of magnitude increases in value along on the way.
Let’s now circle back to the very reason we are here – to
be part of a broad social and economic transition to a circular
economy. To set the scene for the following chapters, the
concept of value and function preservation embodied in the
circular economy, and the theme of transition are introduced
in the next subsection.
Circular economy – preserving value and function
The circular economy is an economic system where products
and materials are kept at their maximum value and functionality.
A starting point is to take a product perspective instead of a
material perspective, and the aim is to set up closed-loops
in which the complexity and functionality of a product is
conserved for as long as possible. This seeks to avoid breaking
a product down into its basic materials after each use cycle.
After all, it is in the functionality and complexity of products
where most of their value lies (Figs. 1.10, 1.11, next page).
Setting this new system up requires a systemic change:
a disruption of the existing patterns and habits of both
producers and consumers. We need different types of
products and services, a new legislative framework and
stronger interaction between people. Digitization and new
technology help; it allows us to do things we could not do
before, such as to produce things in new ways, manage
products more sustainably, and reuse, repair and share.
A circular economy needs durable products that can be
repaired, reused, remanufactured and recycled, while trying
to use fewer and less scarce materials in the first place. Product
design is key to enabling circularity. For example Design-for-
repair and Design-for-recycling are design strategies that aim
to integrate circular economy principles at the early stages
of product design. An alternative angle is to maximize the
functionality of materials, and whenever possible substitute
in other materials that perform the same function but that
are less scarce, or have less environmental impact. Some
products can even be completely dematerialized and sold
as a service instead; music streaming is one such example.
The circular economy needs new business models in order
to translate circular strategies into competitive advantage,
company resilience and successful revenue models. Current
business models focus on product sales, which makes it
challenging to integrate longer use and reuse in the market
approach. How do you create value for your customers while
using fewer materials and conserving resources? And how do
you deliver this value if not through conventional sales? These
are some of the issues that circular economy is trying to address.
Policy also needs to be adapted to support circular
economies. Current policies are still rooted in waste
management, but in a circular economy the very notion of
waste is phased out, as products are designed to prevent
waste, and residues are transformed into new resources.
Waste policies and product policies become linked to each
other, and the resulting new policies need to facilitate circular
material flows, and support the creation of circular businesses.
The transition to a circular economy will require changes
in the way we live our lives. It will create new patterns of
interaction between people, and change the way that we own
and consume products. Action needs to be taken at all levels
of society: industry, citizens, policy makers and researchers.
We will need to embrace a new mindset, shifting from our
current take-make-dispose paradigm to a circular vision.
In the circular product life cycle there will still be material
losses in each step of the chain. We can minimize the losses
through recycling, either back to the start of the cycle or
 materials | Circular Economy 12

Russia
Palladium 46 %

USA France China

Beryllium 90 % Hafnium 43 % Antimony 87 %
Helium 73 % Baryte 44 %
Turkey
Bismuth 82 %
Borate 38 %
Fluorspar 64 %
Gallium 73 %
Germanium 67 %
Thailand Indium 57 %
Natural rubber 32 % Magnesium 87 %
Rwanda natural graphite 67 %
DRC
Tantalum 31 % Phosphate rock 44 %
Cobalt 64 %
Phosphorus 58 %
Brazil Scandium 66 %
Niobium 90 % Silicon metal 61 %
Tungsten 84 %
South Africa
Vanadium 53 %
Iridium 85 %
LREEs 95 %
Platium 70 %
HREEs 95 %
Rhodium 70 %
Ruthenium 93 %

Figure 1.9. Countries with dominant supply shares of raw materials.[5]

manufacturing manufacturing
parts product
REMANUFACTURE/
REFURNISH
processing
raw material distribution

SHARE/
REUSE
A CIRCULAR
SECONDARY PRODUCT
RAW MATERIAL
REPAIR

use
PRIMARY CLOSE-THE-LOOP
RAW MATERIALS
DEMATERALISATION
pre-treatment
collection

Figure 1.10. Closing the loop for a circular economy. [6]

processing
raw material energy WASTE GENERATED
manufacturing
parts manufacturing – downcycling =
product distribution
use
collection MATERIAL LOSING
FUNCTIONALITY

PRIMARY
RAW MATERIALS LINEAR PRODUCT CHAIN

GROWING NUMBER OF REASONS TO LEAVE APPROACH:

New technology allows

Reliable access to raw New consumption
for new manufacturing
materials (cfr. EU raw patterns (user)/
techniques & disruptive
materials strategy) conscious citizen
business models
Cost reduction:
– energy & materials Environmental impact Government wants
– internalized of mining, enery you to (cfr. EU circular
external costs consuption, waste,... economy package)

Figure 1.11. Escalating reasons to leave the linear product chain approach. [6]
13 Circular Economy | materials

Material
Extraction

Material Recycle
Production

Product
LIFECYCLE

Remanufacture
Manufacture

Refurbish/
Transport Repurpose

Reuse/
Sale Redistribute

Use Extend/
Share/Repair

Figure 1.12. Diagram illustrating circular flows (loops) of products and materials in a technical system.[7]

into other products. This means that we need to set up
connections between various circular products. As such, the
circular economy is not actually a circle; it is rather a dynamic
system of interlinked products. This complexity demonstrates
that implementing the circular economy will require strong
interaction between different value chains and sectors.
Another important element is that we need to ensure that
hazardous materials and pollutants are removed from the
circular system. We must develop and maintain clean material
cycles that do not generate health problems or environmental
hazards. Therefore, the system needs safe sinks, such as
incineration with energy recovery for combustible materials,
or safe disposal for (potentially) hazardous non-combustible
materials.
Inner and outer circles
Over the previous decades a lot of effort has been invested
to reduce material losses and bring materials back into new
material loops. Europe, for example, has become successful at
recovering materials from industrial residues and reinjecting
them in the production process. At the end of the product
life, we can also bring materials back into the loop through,
for example, waste collection systems and treatment facilities.
Most of the solutions currently in use rely on waste collection
and recycling, but material management is more than just
recycling; we need to manage the products and materials
that we have in a different way, and dematerialize things.
The concept of outer circles refers to breaking down
end-of-life products and residues into single materials, which
can then be used as raw materials for new products. Inner
circles are a way to retain value by extending the lifetime
of the actual parts and products so they can cycle longer
in the economy before returning to their material basics.
Inner circles are shorter inner loops, that can be achieved for
example through repair, reuse and remanufacturing.
By repairing a product we can create a very small loop
that feeds right back into the use phase; repairing can extend
product lifetime and retain value in the loop for longer.
When we are done with a product that can be reused, we
can create a loop back to the distribution phase, and provide
a second lifetime to the product (Figs. 1.10, 1.12).
A third way of setting up shorter loops is to refurbish or
remanufacture a product. This allows us to create a loop back
to the production stage. Remanufacturing involves taking the
parts of a used product and reusing them in a new product,
possibly after small repairs. By creating these inner circles,
we can preserve value and the functionality of products in a
circular economy for longer.

AUTHORS and PRESENTERS CHAPTER 1: MATERIALS

1.1 MINING Konstantinos Modis and Daphne Sideris – Mining and Metallurgical Engineering, National Technical University of Athens, Greece.
1.2 MINING AND SUSTAINABILITY Philip Peck – IIIEE, Lund University, Sweden.
1.3 FROM MINING TO METAL Panagiotis Davris – Mining and Metallurgical Engineering, National Technical University of Athens, Greece.
1.4 VALUE AND GOVERNANCE Erika Faigen – GEUS, Denmark.
1.5 CRITICALITY AND CIRCULARITY Erika Faigen – GEUS, Denmark.
1.6 TRANSITION TO A CIRCULAR ECONOMY Karl Vrancken – Sustainable Materials Management, VITO, Belgium.
 2
Circular Business Models
15 Circular Economy | circular business models
Figure 2.1. Illustration of a Circular “Product-Service System” business model.[8]
This chapter explores circular business models and discusses how business can create
economic, environmental and social value.
2.1 THE ROLE OF BUSINESS IN THE
CIRCULAR ECONOMY
• Three key strategies help businesses keep resources
and products at high value for as long as possible:
closing loops, slowing loops and narrowing loops.
• Approaches that pursue resource efficiency, longer
product lifetimes, and material recycling are vital to
closing, slowing and narrowing.
• The combination of the three strategies in circular
business models is an ideal that companies must pur-
sue for the circular economy to be achieved.
The concept of a circular economy allows us to focus on issue
of resources and how they are used and managed in a business
context. In our current linear economy, we are using too many
resources, too fast, and we are not reusing enough of them.
In this section, we present three key approaches to address
this – strategies to narrow, slow, and close resource loops. The
goal is to keep resources and products at their highest value,
for as long as possible, and to extend their lifetime to ensure
that they can function for longer (Fig. 2.2, next page).
Narrowing loops
In a business sense, narrowing loops, is about reducing
the amount of materials needed per product or service.
Fulfilling the narrowing principle is something we’re already
quite good at in the current linear economy. It is about
resource efficiency, or doing more with less, which is also an
opportunity to reduce costs.
Narrowing loops is an essential strategy in a circular
economy, but narrowing strategies may not account for
what happens with the product after it has been used. It
may not include consideration of whether the product can
be reused or remanufactured; or recycled. In the current
linear economy, many efficiently manufactured products are
thrown away after only being used once, but in a circular
economy we try to retain the value of products and materials.
Slowing loops
In order to put this into business practice, we also need to
develop the business models and value chains to support
continuous reuse over time. This is called slowing loops.
Generally, this means we must create products that have a
long life span, and which people will want to use for a long
time. But there can be trade-offs between durability and
resource efficiency in production – building more durable
products can actually increase the amount of resources
needed for production. Thus, we must also try to design
products that are easy to repair, maintain, upgrade, refurbish
and remanufacture, so that extra resources used in production
can be offset by the longer use-cycle of the product.
Businesses that pursue the design of long-life goods,
product-life extension and service loops of repair and
remanufacturing can extend or intensify the use of products,
resulting in a slow-down of resources used. Out of narrowing,

slowing and closing loops, slowing is actually the most
important strategy – and also the hardest. This is because
it requires us to both change the way that we design and
manufacture products, but also how we use these products
in our everyday life. If we can slow loops we can decrease the
amount of resources that we have to put into the loop in the
first place, and then we can also reduce the amount of waste
that has to be processed and recycled at the end! (Fig. 2.2)
Closing loops
After many cycles of reuse we need to close the loop and
recycle. Central to successfully closing loops is to avoid the
mixing, or cross-contamination, of materials. When materials
are not mixed, such as when glass is separated from plastic,
they are much easier to recycle. Most of the clothes we
wear are mixes or blends of different materials, which
makes them difficult to recycle. But some companies are
developing opportunities out of this challenge; the start-up
ReBlend (www.reblend.nl/) for example spins new yarn out
of these discarded mixed materials for use in new furniture
and clothing.
Ideally, though, we want to be able to separate these
materials and reuse them in their original form. Separating
materials means that flows are not contaminated and
products can easily be dismantled and remanufactured or
recycled. These strategies of disassembly and reassembly will
be instrumental in closing the loops.
How to narrow, slow & close
There are several ways we can narrow, slow, and close
resource loops. Narrowing loops can be achieved through
using fewer resources per product as well as during the
production process. An example of this is lean manufacturing,
where the efficiency of production processes is constantly
optimized, reducing both costs and environmental impacts.
These benefits help explain why narrowing loops is
widespread in our current linear economy. Another example
is lightweighting cars, which saves materials in the production
phase and fuel in the use phase. A British automotive startup
company, Riversimple (www.riversimple.com), has worked
with this idea to create a prototype car weighing less
than 600kg, a fraction of the typical weight of a car. And,
Riversimple actually combines narrowing loops with other
strategies like moving from ownership of a car to access
to a car, which also helps with slowing and closing loops
(Fig. 2.3., next page).
Slowing resource loops can be achieved through the design
of long-life goods and product-life extension. The time during
which we use products is extended or intensified, resulting in
a slowdown of the flow of resources. Perhaps the most classic
example of loop slowing is where businesses design products
to last. A watch or a piece of classic furniture may be designed
to be passed on from one generation to the next.
Instead of focusing on product life extension, businesses
can also focus directly on slowing consumption of products
or resources, but this is very challenging.
Consider the example of a government funded
circular business models | Circular Economy 16
Figure 2.2. Conceptualising slowing, narrowing and closing
of loops. [9]
project started by the Dutch university TU Delft (www.
homiepayperuse.com), which experiments with business
models to slow consumption. This project aims to incentivize
customers to reduce the impact of home appliances, starting
with washing machines. Rather than buy a washing machine,
consumers pay per wash in high quality machines provided by
the project. The machines last a long time and are built to be
reused and recycled. What is really novel here is that this test
project also seeks to change user behaviour by incentivizing
fewer and lower temperature washes. Customers only pay
when they use the washing machine and they pay less if they
wash at cold temperatures.
Repairing, cleaning and maintaining products also help
to slow down loops, as does making new products from
old ones, or remanufacturing. This strategy is already being
adopted for medical devices. Used devices are thoroughly
checked and tested for compliance, worn parts are replaced
and software is updated to current standards. In this way the
life cycle of the product can be extended, decreasing wastes
and delivering cost-savings for medical facilities.
Businesses that challenge current consumption models
can also slow resource loops. An example of a company
applying this idea is the outdoor apparel company Patagonia
(www.patagonia.com). Their Common Threads Initiative
encourages people to consume less, and instead repair, reuse
and recycle clothing. An advertisement by the company in
the New York Times newspaper, “Don’t buy this jacket,”
is a notable example of an effort to create awareness for
slow consumption. After the ad ran, many people still bought
the jacket though, highlighting the practical complexity of
slowing loops.
Businesses can pursue the closing of resource loops
through recycling, where the loop between disposal and
production is closed to create a circular flow of resources. In
major industries like paper, metals and plastics, recycling rates
17 Circular Economy | circular business models
Figure 2.3. The Riversimple (Rasa) prototype vehicle.[10] (Provided by Riversimple. Photographer: Anthony Dawton).
are already quite significant, but there’s still plenty of work to
be done in terms of design, business models and value chains
to improve recovery rates as well as recycling rates.
Closing loops can reduce the amount of waste that goes
to landfills, but if done the right way, it can also save on
costs for raw materials, as recycled materials can be used in
new products. Nike Grind (www.nikegrind.com) for example
makes new sports fields out of old shoes and G-Star’s
(www.g-star.com) Raw for the Oceans turns ocean plastic
into new garments. Crossing industry boundaries, the floor
covering company Interface (www.interface.com) created
the Net-Works initiative to make new carpets out of fishing
nets. They also work with local communities to prevent future
disposal of fishing nets into the sea.
Of course, work to achieve a circular economy is helped
if value chains and business models are designed so that
the products do not become a waste in the first place, and
are instead recovered or recycled. This would mean that
LINEAR ECONOMY
user
ADD DESTROY
VALUE VALUE
retail
assembly
manufacturing
extraction
PRE-USE USE POST-USE
Figure 2.4 The value hill in linear and circular economies.
some waste to value business models, especially relating to
materials which would have been landfilled or dumped in the
ocean, would not be necessary. We would prevent the waste
in the first place, and create continuous loops of product
reuse and material recycling.
Closing loops requires innovative thinking; what might
be considered waste in one process can often be a resource
for another. In the food industry, In the food industry for
example, mushrooms can be grown using coffee waste and
salad crops can be fertilized nutrients derived from waste
through an aquaponics process; in such ways waste can
become “food”.
In a perfect world, companies would combine strategies
of narrowing, slowing and closing resource loops in a circular
business model. While this is still an ideal rather than a norm,
some companies are already moving in this direction. One
example is the start-up MUD Jeans (www.mudjeans.eu), the
first firm in the world to lease jeans to customers, with
CIRCULAR ECONOMY
repair/maintain
ADD RETAIN
VALUE VALUE
reuse/redistribute
refurbish
remanufacture
recycle
PRE-USE USE POST-USE
[11]

an aim to stimulate a sustainable lifestyle through clothing
reuse and recycling.
Companies in a circular economy work to retain the
value of resources by encouraging reuse, refurbishment and
remanufacturing, followed by recycling; utilising these service
loops helps maintain the value of products (Fig. 2.4).
To achieve this goal, the circular economy requires
innovations at the technology, business model, design and
value chain level that have clear circular intent. These then
need to be followed up by assessment of actual impact.
2.2 CIRCULAR ECONOMY BUSINESS
MODEL STRATEGIES
• Business models describe the organizational and
financial structures where an organization converts
resources and capabilities into economic value.
• Innovation is required to deliver business models that
create value from cycling products, parts, and materials.
• Strategies from three elements: circular value creation;
circular value proposition; and circular value network
can be combined to form a circular business model.
To help companies adopt circular strategies that can narrow,
slow and close resource loops, business model innovation is
essential. By taking a closer look at what a business model
is, we can gain insights into what this actually means and
why it is relevant.
What is a business model?
A business model is a management tool that is used to
present the company’s organizational structure and value
creation processes. It describes the organizational and
financial architecture by which an organization converts
resources and capabilities into economic value. A widely
used definition, created by analysts Osterwalder and Pigneur,
describes the business model as the core logic of how a
company creates, delivers, and captures value. Osterwalder
and Pigneur created a framework, the Business Model
Canvas, for supporting work with business models, including
circular business models, that has been acknowledged for its
practical relevance (Fig. 2.5).[11]
A business model consists of different elements that can be
adjusted in innovative ways to enable and integrate more circularity.
These elements can be structured into three value dimensions:
• value proposition – describing the value provided and to
whom;
• value creation and delivery – detailing how value is created
and delivered;
• value capture – outlining how value is captured and turned
into profit.
Each of these value dimensions consist of a number of
business model elements.
An example of a fictitious backpack company, Waterproof
Bags Incorporated, can be used to help clarify how these
fit together.
circular business models | Circular Economy 18
Value dimensions and business model elements
VALUE PROPOSITION
What value is Offer and value proposition
proposed and
to whom?
Customer segments
Customer relationships
VALUE CREATION
AND DELIVERY
Key resources and capabilities
How is value
created and
Channels Key partners
delivered?
Key activities
VALUE CAPTURE
How is value Revenue flows
Captured?
Costs
Figure 2.5. The Business Model Canvas visualizing business
model value dimensions and elements.[12]
A value proposition dimension, the value that the product
or service creates for customers, consists of three elements:
customer segments; customer relationships; and the actual
value proposition.
In this instance, Waterproof Bags Inc.’s main value
proposition is that its bags are 100% waterproof and the
customer segment targeted is “adventurous people” who
spend a lot of time outdoors. The customer relationships
strategy is “co-creation powered by social media”, where
the company’s customers are involved in the development
of upcoming models.
The value creation and delivery dimension consists of
four elements: key resources and capabilities, channels, key
partners and key activities. For Waterproof Bags Inc., the key
resources and capabilities include the development of new,
lightweight, waterproof materials. To establish channels with
customers, they decide to focus on online sales to support their
online community. Their key partner is a large cycling parcel
delivery company that helps them promote the backpacks in
action. Their key activities are lean manufacturing and sales.
The value capture dimension consists of two elements:
revenue flows and costs. In this case, the revenue model
is quite simple: Waterproof Bags Inc. receives income from
selling bags to its customers. Its main costs are incurred in
manufacturing, retail activities, and management of the
online community.
Innovating business models
Innovating the business model means to alter or re-link
some of the business model elements. Innovating business
models can take two forms: the development of an entirely
new business model, or the reconfiguration of existing
business model elements. As such, innovating the business
model can help coordinate technological and organizational
innovations. The process can also help secure partner
networks or capabilities needed to preserve and utilize the
embedded value in resources. Business model innovation
can help businesses devise an offer and value proposition
19 Circular Economy | circular business models
that proactively embeds a circular strategy; for example, by
prolonging the useful life of products and parts, or by closing
material loops. By rethinking the three value dimensions
(i.e. how value is created, delivered and captured), business
model innovation provides a more holistic approach for
aligning a company’s value-creation logic with circularity.
Adding circularity
When performing business model innovation in pursuit of
a circular strategy, shaping and adjusting business model
elements can make implementation of the strategy easier.
This can also help overcome barriers and capture value.
For example, the value proposition can be designed to
deliberately use a circular strategy and target customers
that find the associated value appealing. A value proposition
might be a “long-life product with low maintenance and
lifecycle costs”. This can be appealing to customers with
a high environmental awareness or to customers that are
bothered by products that quickly become obsolete. For
the same product or products, relationships with customer
segments can be designed so as to encourage return of a
product after its use, such as through establishment of closer
and more service-oriented relationships, or by offering a
financial reward upon return – or both.
Value creation and delivery elements can be devised to
successfully create and deliver the value of a company’s
circular offer. Operating a circular strategy requires specific
activities, resources, technologies, capabilities, and partner
networks to successfully prolong the life of products and
close material loops. A company needs to shape these
elements in a way that allows it to embed circular practices
in its business model. This might require that it find partners
that have special capabilities that it doesn’t currently have.
For example, partners that can test and certify quality of
repaired products, or partners able to provide sufficient
volumes of discarded products to be upgraded or reused.
Value capture elements in a circular business model
might be adjusted to generate additional revenue by
selling (essentially) the same product several times, or by
capitalizing on environmental benefits associated with
resource conservation. There may also be opportunities to
reduce production costs via the use of cheaper secondary
materials, or to avoid costs for end-of-life disposal.
For every business model, depending on the circular
strategies operated, or the type of product, the business
model elements will be shaped differently. But through
paying close attention to how these elements are shaped
and by making sure that they support implementation of
the specific circular strategy, circularity can become a part
of a company’s value creation logic and the barriers can be
gradually removed.
A note about value creation in circular business models
The sources and processes of value creation in circular
business models differ from those in linear business models
to some extent. To preserve and utilize the embedded value
in products, parts, and materials for as long as possible,
business models need to shift their focus beyond a single
use cycle by enabling interventions such as resource
recovery, and multiple use cycles.
Emerging research on managing value creation from
prolonged life cycles suggests several unique characteristics
of business model elements designed for preserving resource
value. If additional life cycles of a product are enabled, it
can be useful if the value proposition, from the beginning,
is thought of as more fluid and subject to re-definition
along the product life cycle. For value creation and delivery,
different value networks for cycling resources need to be
established; for example, partnerships for securing sufficient
supply of secondary products. For value capture, some
activities along the product life cycle will result in additional
costs (e.g. collection), while others can reduce costs (e.g.
substituting virgin materials with secondary materials).
Revenue streams can be captured multiple times throughout
the lifecycle; for example, through extended spare part and
aftermarket services during a first use cycle or accessing
new markets and customer segments in a second cycle.
Thus, in order to create and capture value from prolonging
the useful life of products and parts and closing material
loops, separate value creation architectures may need
to be designed to create value from each cycle. Business
model development needs to consider how business model
elements are configured to support each of the envisioned
cycles if value is to be preserved and utilized.
To seize opportunities for preserving and utilizing resource
value in the business model, timely consideration and
integrated planning of the required interventions for each
cycle is pivotal.

Key strategies for circular business models
When asked to provide an example of a circular business,
many people will likely respond “a recycling company”.
Others might tell you of “a reuse shop”, and a few may
probably refer to a “car sharing” platform. Despite these
activities being quite different, they would all be correct!
With such variety available, it is important to consider what
it is that makes us call a circular business “circular”.
In this light, it can be observed that actors working
with a wide range of circular business models and circular
businesses have identified three key ingredients for a circular
business model:
• the company should engage in some form of circular value
creation;
• the business should make use of value propositions that
enable circularity;
• the activities and the business should be embedded in a
circular value network (Fig. 2.6).
The first key ingredient, circular value creation, stands
at the heart of a circular business model. Circular value
creation means that the business model should include one
or more ways to close, slow or narrow resource loops. Several
strategies exist to create circular value, such as recycling,
repairing, remanufacturing and reusing. We can also seek
to increase the amount of use a good has during its lifetime
Circular Value Creation Value Proposition enabling circularity
+ +
Figure 2.6. Three key ingredients for circular business model application.[6]
circular business models | Circular Economy 20
(i.e. improve its utility rate), make products more resource
efficient, or avoid the use of toxic substances.
A solid value proposition is the second key requirement.
Circularity is important, but it also has to be a part of a viable
business, and businesses need customers. The best value
proposition depends on the needs and motivations of your
customers. If customers are interested in a product made
from waste materials for example, then a firm could use a
circular branding strategy. This is what a company called
Flagbag does for their leisure bags and purses: the design
clearly emphasizes the origins of the waste materials they
use (Fig. 2.7, next page).
For other customers, a premium brand strategy may be
more attractive. Vitsoe, for example, produces furniture
products that are intended to last a lifetime; they put product
quality and longevity at the centre of their value proposition.
Another value proposition strategy that can enable
circularity is a product-service offering. Here, a company
delivers the product as a service rather than selling a good
directly. In this configuration, the company still owns the
product. It is now in their interest to make sure that it
lasts as long as possible, which makes repairing, reusing, or
remanufacturing more important. This strategy is applied
in “pay-per-copy” models, that allow companies like Ricoh
(www.ricoh.com) to manage their copy machines like
assets.
Circular Value Network
21 Circular Economy | circular business models
Figure 2.7. A Flagbag bicycle bag.[13] (Image provided by FlagBag).
Other value proposition strategies can focus on reducing
costs for the customer. For instance, by offering a product or
service that is cheaper than the linear alternative, providing
a platform to share underutilized capacity, or by eliminating
product inventories via production on demand systems.
Some companies have also demonstrated that you can
use circular business models to increase business without
necessarily branding yourself as a circular business. Nearly
New Office Facilities (www.nnof.be), for example, focuses on
customer needs for affordable office furniture combined with
a healthy work environment. The fact that they use materials
from old furniture in the manufacturing of new furniture is
something many people may not even notice.
The third and last key ingredient for a circular business
model is the value network that surrounds the company.
Closing, slowing or narrowing resource loops is only possible
when the stages of a product life cycle are connected in
such a way that the product and its resources can be kept
inside the economy. This requires collaboration between
the company and other actors in a value network. Such
collaboration can be set up with customers or suppliers in
the value chain, or with companies, governments, or civil
society in a wider value network.
Value networks can be created in many different ways. A
deposit refund scheme for example, improves the return of
goods to the producer, while online platforms can be used
to manage the movement of goods in a network. A value
network at a local scale can help reduce the loss of resources
in complex global value chains. One famous example of this
is the industrial site of Kalundborg in Denmark, where a local
closed resource network has been formed. At this location,
residue, by-product and waste streams from a range of
companies are used as input resources for other business
and organizations.
Circular strategies and the Business Model Canvas
It is possible to connect the three ingredients to the Business
Model Canvas components to help identify potential
strategies to increase circularity. Circular value creation
strategies are typically linked to the key activities, key
resources and capabilities, or key partner elements in the
Business Model Canvas. Value proposition strategies are
linked to the product offer, customer segments and customer
relationships elements. And value network strategies can be
linked to the delivery channel, customer relationships, key
partners or key resources and capabilities elements.
While the Business Model Canvas, in combination with
the circular strategies, is a very useful place to start designing
a circular business model, it is less suitable to use in mapping
circular value networks, a crucial part of any successful
circular business. Therefore, the next section presents two
tools that can be used to design circular business models with
the circular value network in mind.
The importance of a circular value network
– an example
The success of a circular business model depends on the creation
of smart combinations of circular value creation strategies, value
proposition strategies, and value network strategies.
Consider a company that produces repairable and
recyclable smartphones. While the design for repair and
recycling the smartphone is key to creating circular value,
 circular business models | Circular Economy 22

such circular value is actually only realized when the product
is in a repair shop or recycling facility.
As such, the producer needs to create incentives for their
customers to return the phones when they are damaged, or
when the customer has finished using them. The producer
also needs to work with repairers and recycling companies to
make sure the smartphones are repaired when broken, and
recycled when repair is no longer possible.
There are a number of combinations of circular strategies
that can make these situations technically and economically
feasible. A first, and very common one that can be found in
Europe, is the creation of an extended producer responsibility
(EPR) scheme. This is a collective, government-controlled
mechanism in which producers are required to finance the
collection and recycling of end-of-life products – including
end-of-life smartphones.
Although this value network strategy has been shown
to support increased recycling, many smartphones still end
up in consumers’ drawers at home, as at present there is
no real incentive for them to have their phones repaired or
collected. The producer of the smartphone, also generally has
no direct benefit of its design-for-circularity efforts, as there
is no direct link between producers and recyclers. In simple
terms, the value of the design efforts gets lost.
However, such challenges can be overcome if actors in
the system improve aspects of the circular business model
design. For example, the producer can directly cooperate with
its customers by offering a discount on new products when
an old smartphone is sent back. The producer may then re-
market the collected smartphones in other markets, or capture
residual material value by having the phones recycled.
An even more effective circular strategies combination
that can capture all the circular value of smartphones
designed for circularity, can be to introduce a Smartphone-
as-a-Service as the value proposition. This scenario allows the
producer to keep control over its product both during and
after the use phase, and it also creates leverage to maximize
the reuse, repair and recycling value of their products. As
the owner of the products, the smartphone company can
engage in partnerships with repairers and recyclers within
its business model. Providing information such as product
disassembly guidelines, or the detail bill of materials for the
product, or by jointly organizing reverse logistics, can also
help these partners to improve their own activities – in turn
improving the overall viability of the system.
The role of Products-as-a-Service in the circular
economy
Providing services to the customer instead of selling the
product is a key strategy to create a circular economy. A
product-service offering, or Product-as-a-Service (PAAS), is
one type of value proposition that can be used to achieve
circular value creation.
Viewing this as a value proposition, where a combination
of product and service elements are offered to the customer,
is one way to understand how this functions. Such models
are by no means new! Libraries and cable television for
example, have applied this model for many years. With the
advent of digital technologies it has become increasingly
easy and interesting to use a PAAS strategy for a wider
range of products. PAAS has completely changed the music
industry in recent years. Start-ups such as Spotify have
brought the value of music to its customers without ever
having to produce, distribute, or play a hardware form of
music such as a CD.
PAAS exists in many forms and variations, but for circularity,
it is relevant to make the distinction between three types of
PAAS: product-, use-, and result-oriented PAAS (Fig. 2.8).
A product-oriented PAAS still closely resembles a
conventional sales offer in that the ownership of a tangible
product is still transferred to the consumer. However, it differs
because there is an addition of a service offering to provide
additional value to the consumer during the use phase of
the product. This can include the provision of consumables
linked to the product, and the performance of maintenance
or repair services.
A use-oriented PAAS reverses the ownership model: the
product is leased or rented rather than owned, in addition to the
provision of similar services as in the product-oriented model.
The use oriented PAAS benefits the provider as the product
will generally be returned after the use contract has expired.
A result oriented PAAS takes an additional step towards
a service-only model: the provider assesses the need of the
consumer, and decides which product or products can help

Product-as-a-Service: a value proposition in which a product and service offering are combined
Three main types:

PRODUCT ORIENTED USE ORIENTED RESULT ORIENTED

– Product is sold, plus: – Product is leased, plus: – Value proposition = commitment to

– service offering during use phase; – service offering during use phase; achieving a result.

– provision of consumables, – provision of consumables, – Product is a means to achieve the result.

maintenance and/or repair. maintenance, and/or upgrades;
– take-back after use possible;
– shared use is possible.

Figure 2.8. Product-as-a-Service orientations.[6]

23 Circular Economy | circular business models

Circular Value Creation Alternative models

Repair/Upgrade Independent repair shops

Repair/Upgrade Resell platforms

Repair/Upgrade Extended producer responsibility

Repair/Upgrade Ecodesign measures

Repair/Upgrade Sharing platforms

Figure 2.9. PAAS orientations and circular value creation strategies.[6]

her in addressing the customer’s need. In such a model,
the provider does not sell or lease products anymore, but
the function related to those products: the lamp is not
leased, but rather the required level of light is provided to
the consumer.
PAAS does not lead to a circular business model by
itself, rather, it provides the company with the tools to
enable more circular production and use of their products.
These include: long term relationships with the customer;
access to the product during use, and ownership of the
product that in turn allows the company to capture the
value, or reuse, remanufacture or recycle. It is up to the
company to take advantage of these tools in setting up
circular value chains.
Figure 2.9 provides an overview of how the three main
PAAS types can contribute to different circular value creation
strategies. It also lists alternative models to PAAS that may
be applied in order to achieve the same, or similar, circular
value creation strategies.
EXPLORE FURTHER – THE CIRCULATOR
To help you with the design or analysis of a circular
business model, the Circulator (Figure 2.10) has been
developed. This can be found at www.circulator.eu. This
web-based tool allows you to explore circular strategies,
using the “Strategies Mixer”, and to combine them ac-
cording to your own preferences.

Product Service System – product oriented

Product Service System – use oriented
Substitution
Product Service System – result oriented
Resource efficiency

Asset sharing
Optimal product use

On demand

Repair Instructions
1. Click on a strategy to explore
2. Click ‘add’ to add them to the mix
Branding (eco/premium)
3. Repeat for a second or a third strategy

Reuse 4. Click on the number below ‘in the

mix’ to show the resulting cases for
you mix
Cost reduction

Remanufacture

Industrial Symbiosis
Material Recycling
Take back management
Value network collaboration

Platform (online, other)

Localisation
Value chain collaboration

Figure 2.10. The Circulator – an example of a circular business model tool.[14]


2.3 BUSINESS MODEL INNOVATION
• Circular business model planning tools can be used to
analyse business models – both strategies that imple-
ment circular strategies and those that do not yet do.
• Specific actions can be taken to embed circularity in a
business model and create product and material cycles.
• Business elements that need to be adapted to support
value creation can be more easily identified and adapt-
ed if a specific tool is applied.
As an aid to business model innovation, visualization tools
that depict circular business models can be used to help
plan product life cycles that create and capture value from
multiple use cycles and closed material loops. A visualization
tool can also highlight how business model elements may be
adjusted to effectively implement each cycle.
The Circular Business Model Planning Canvas is a
visualization tool to map circular business models. It offers
a standardized representation of the elements, and possible
cycles of circular business models, that can prolong the useful
life of products and parts, and close material loops. This tool
integrates the three value dimensions discussed earlier (value
proposition, value creation and delivery, and value capture,
and their business model elements, in the left-most column
(Fig. 2.11, next page).
Further, it applies four lifecycle interventions (seen at the
top of the Canvas):
• collection and reintegration of resources;
• enabling prolonged useful life;
• enabling additional lifecycles of a product or its parts;
• enabling material recovery.
It is important to note that collection and reintegration
is mapped twice in planning tool. This is because these
processes can take place both upstream and downstream in
a company’s value chain.
The tool maps business model elements for each of the
enabled interventions. It can help you recognize which
interventions for circularity are currently utilized and which
are not. This can reveal innovation opportunities to embed
more circularity in the business model. It can also help you
analyse if the business model elements are configured to
effectively support each of the envisioned cycles. Lastly,
it can help recognize interdependencies between the
enabled cycles and how shaping business model elements
to support one cycle, enables value creation from another
cycle (e.g. customer relationships established in the first sale
can be configured in a way that they facilitate collection of
products later).
In practice, the tool can be used for:
• integrating innovative ideas into consistent business models;
• the development of the common understanding within
teams, and among internal and external stakeholders,
that is necessary to support effective implementation of
business model innovations;
circular business models | Circular Economy 24
• collaboration processes among companies that help them
recognize interdependencies and align business models;
• the management of value networks and partners.
The Fairphone circular business model
Filling out the Circular Business Model Planning Canvas
using details from a mobile phone manufacturer and
distributor named Fairphone (w w w.fairphone.com),
provides an example of how it can be applied in practice
(Fig. 2.12, next page).
Fairphone offers a modular long-life phone and both
replacement modules and repair guides can be accessed
via the Fairphone website. Their customers are presented
a value proposition of competitive performance standards,
reparability and low lifecycle costs, as well as access to a
website community where Fairphone users can – among
other things – discuss repair techniques.
As part of their business model, Fairphone has an
intertwined relationship with a collaboration partner named
Teqcycle (www.teqcycle.com); a repair and recycle company.
Fairphone offers Teqcycle a resale opportunity and thus the
value proposition for Teqcycle includes the modular design
of the Fairphone. This in turn makes repair and resale of
phones relatively easy. Fairphone also collaborates with
Teqcycle for the take-back system. Customers for the
re-purposed phones are in fact not direct customers of
Fairphone, but are customers of Teqcycle, so they are not
mapped in this version of the model.
Filling in the model canvas highlights interdependencies
between the interventions, and how shaping business
model elements in one intervention enables value creation
through other interventions. In the case of Fairphone, the
relationship established with users when selling the phone
helps them reach out to users and inform them of repair
possibilities, and to promote the return of phones. The de-
sign for repair and recycling facilitates value creation after
use for its partner Teqcycle.
Not all of the interventions have to be addressed in
a circular business model. Examination of the last two
interventions represented on the canvas, demonstrates
that the responsibilities between Fairphone and Teqcycle
are more and more divided. And not all business model
elements of the focal company Fairphone are filled in.
Typical reasons for this are that some interventions may
not be more resource efficient or economically desirable,
or that they can rarely be realized by one company alone,
but are reliant upon networks of companies that align their
business models to each other. In the case of Fairphone, no
integration of secondary materials in their own products is
happening as yet. The blank columns in the circular business
model canvas, however, send signals that there may be an
opportunity for embedding more circularity in the business
model, and that is worth exploring.
25 Circular Economy | circular business models

l
Circular Business Model
Collect & reintegrate First sale (with Collect & reintegrate Additional sale of Enable material
(reduce
( primary materials) prolonged use) (organize take-back) product or parts recovery
VALUE
PROPOSITION

Offer
………………………… ……………………………… …………………… ………………. …………….
Value proposition
………………………… ……………………………… …………………… ………………. …………….
Customer segments
………………………… ……………………………… …………………… ………………. …………….
Relationships
customers/partners
………………………… ……………………………… …………………… ………………. …………….

VALUE CREATION
AND DELIVERY

Key activities
………………………… ……………………………… …………………… ………………. …………….
Key resources/
capabilities ………………………… ……………………………… …………………… ………………. …………….
Key partners
………………………… ……………………………… …………………… ………………. …………….
Channels
………………………… ……………………………… …………………… ………………. …………….
VALUE CAPTURE

(2017)
Nussholz(2017)
Costs
………………………… ……………………………… …………………… ………………. …………….

J.J.Nussholz
Revenue flows

Figure 2.11. The Circular Business Model Planning Tool.[12]

Circular
Circular Business
Business Model:
Model
Fairphone
Fairphone

Collect & reintegrate First sale (with Collect & reintegrate Additional sale of Enable material
(substitute primary prolonged use) (organize take-back) product or parts recovery
VALUE
materials)
PROPOSITION

Modular long-life phone; Free shipping for Resale for

Offer two EOU phones
Material recovery
…………………… replacement parts
……………………………… ………………….…..…
Teqcycle
…………………. ……….……….
(e.g. gold)
Value proposition High performance phone; Easy, free-of- Easy repair of Easy recycling
…………………… ………………………………
low LCC; reparability …………………......…
charge shipping ………………….
phones ……….……….
of phones
Customer segments Private individuals; firms; All Fairphone
…………………… ………………………………
public organizations
……………………...…
customers …………………. ……….……….
Relationships Community-based, Community-based, Collaborative Collaborative
customers/partners
…………………… ………………………………
transactional with customers
……………………..…
transactional ………………….
with Teqcycle …….………….
with Teqcycle

VALUE CREATION
AND DELIVERY Production; ‘Sustainable’
value chain management, Support EOL
Motivating return of Support EOL
Sales; Shipping
Key activities management management
…………………… ………………………………
Fair-sourced materials;
high-value phones
…………………........ …………………. ……….……….
Design for Design for
Key resources/ Modular phone design;

ISBN number 978-91-87357-32-9

Collection scheme
capabilities …………………… ………………………………
Software ………………….....… ………………….
disassembly
………….…….
recycling

Part manufacturer; Software Teqcycle for Teqcycle for Teqcycle for

Key partners
…………………… ………………………………
developers; NGO’s ………………….…....
shipping ………………….
resale ………….…….
recycling

Sales via website and Free shipping for

Channels
…………………… ………………………………
retailer ………………..…......
users via website …………………. …….………….
VALUE CAPTURE
Nußholz
J.L.K.Nußholz

Production and operations Shipping

Costs …………………… ……………………………… …………………......… …………………. …….………….
J.L.K.

Revenue flows Sales of phones and

replacement parts
www.Fairphone.com

Figure 2.12. Fairphone and the Circular Business Model Planning Tool.[12]

2.4 DRIVERS FOR ENTREPRENEURSHIP PESTEL analysis

IN THE CIRCULAR ECONOMY
• A mainstream business tool, the PESTEL framework can
be used to assess a circular business strategy against
the external business and social environment.
• Effective use of PESTEL requires clear and strict delin-
eation of factors that are external to a business from
those that are firm-internal.
• When factors are categorized correctly, the PESTEL
framework is useful for the identification of political,
economic, societal, technological, environmental, and
legal drivers for the establishment of circular business
models.
The transition to a circular economy is not expected to be
an easy, gradual evolution. It requires a profound change in
the way we live, travel, work and do business. To succeed,
radically new ideas must gain momentum and find a window
of opportunity to change the mainstream system. These
windows of opportunity emerge when different trends
and events in society suddenly come together and point
in a similar direction, making room for a new mindset, or
helping to make a place in markets for products or services
that offer something different. When this happens, a new
product or a new service may suddenly break through and
contribute to a profound change in our way of thinking
and acting.
 circular business models | Circular Economy 26

The right idea at the right time is what entrepreneurs are P – Political
looking for. Unfortunately, the process of creating the right
time is largely out of our control. Changes in technology,
market conditions, social trends, government policies and
regulations, and other factors combining generally define
such points in time – and it is difficult, if not impossible to
influence so many things. Such parameters have a large
impact on whether a great idea can actually turn into a
real business opportunity or not. Companies must react
and accommodate the changed conditions into their value
proposition, company policies, and their marketing strategy.
This means that understanding what these external factors
may be, and how they work together, is key to recognising
ideas that are most likely to be successfully developed.
The PESTEL framework, which is often used in marketing,
E – Economic
is a useful tool for this. It lists key external (macro-)influences
that can affect a business’ strategy and success. They are
listed according to the following six factors ascribed to the
acronym PESTEL.

P for Political – These factors determine to what degree

the government and government policies intervene in the
economy or a specific sector. This can include government
policy, and political stability or instability in local as well as
overseas markets, trade restrictions, fiscal incentives and
taxes, labour regulations, environmental law, and so forth.
Companies must be aware of, and able to respond to, current
and anticipated future legislation, and adjust their business
strategy accordingly.
S – Social
E for Economic – These factors have a significant impact
on the economy, which in turn impacts the profitability of a
company and the way in which it can do business. Factors
include the level of economic growth, employment rates,
interest and exchange rates, inflation, disposable income of
consumers, raw material and energy costs, and more.

S for Social – Socio-cultural factors determine the customers’

needs and wants and are of particular interest to marketers.
They include the characteristics, the shared beliefs and
attitudes of the customer population. These are assessed by
factors such as population demographics, education levels,
general health status, lifestyles and attitudes.

T – Technology
T for Technological – Technologies change rapidly and
can have a huge impact on the way products are made and
marketed. Technological factors affect the way in which
goods and services are produced and distributed, as well
as the way in which customer communication is created
and delivered. Factors include parameters such as changes
in automation and robotization, and trends in digital and
mobile technologies.

E for Environmental – These relate to the impact of ecological

factors and constraints. Environmental factors have become
important due to increasing environmental awareness by both
governments and consumers. Concerns – and tangible impacts
27 Circular Economy | circular business models
E – Environmental
on businesses – related to issues such as resource scarcity,
pollution, carbon footprint, and climate change are also
notably influencing choices made by companies. In the context
of the Circular Economy, the E for Environment parameter
in the PESTEL framework is oftentimes stretched to include
broader sustainability issues. One leading example is a shift
towards more ethical and sustainable business policies. With
more and more consumers demanding ethical and sustainably
sourced products, corporate strategies that explicitly account
for sustainability issues are also gaining importance.
L for Legal – Legal factors include parameters such as
employment policies, consumer rights, health and safety
standards, advertising rules, privacy, product labelling,
warranties, liability, trade restrictions, and so forth. It is clear
that companies need to understand the legal boundaries
within which they must operate. This can become particularly
challenging when a company operates on an international
level, as each country has its own rules and regulations, and
they often differ. There are also a range of legal issues with
new forms arising related to circular economy activities –
liability and intellectual property rights are just two of these.
By undertaking such as structured assessment of external
factors that may affect an organization, a company can improve
its resilience to external threats and identify windows of
opportunity for new business strategies. This in turn may create
a competitive advantage for the firm. In recognition of this,
the parameters within a PESTEL analysis are often described as
drivers of change as can define issues that stimulate a company
to change its strategy, or the manner in which it does business.
Ignoring such drivers can negatively affect a business.
It would be prudent to perform a PESTEL analysis before
implementing any strategic or tactical plan, and to repeat it
at regular times to monitor and respond to any changes in
the macro-environment.
Examining today’s drivers for circular economy
businesses
Although the circular economy is still a relatively new
business paradigm, many companies have already taken
steps towards becoming more circular. New circular start-
L – Legal
ups are emerging every day. Clearly these entrepreneurs have
identified windows of opportunity to challenge the current
linear strategy of take-make-and-dispose and move towards
a circular business strategy.
The PESTEL framework has been introduced here as a
tool to analyse firm-external drivers for circularity. Here it
will be applied in a 2018 context in order to help understand
conditions that appear to be making more and more
entrepreneurs believe that now is the right time to include a
circular business model in their business.
P – Circular economy is high on the political agenda. Many
individual countries have adopted policies and tax measures
that incentivize circular products and business models. For
example, some countries like Sweden have reduced value
added taxes (VAT) on repair services and lowered labour taxes
for repair works in order to stimulate reuse and repair. At a
policy level there are also many discussions happening around
the extension of product warranty periods as a measure to
discourage products that are designed to break down fast, a
feature which is often referred to as planned obsolescence.
E – A key economic driver for circular thinking is the
current volatility in resource prices. The risk of sudden
price fluctuations on the material markets is encouraging
companies to take back products after their service life, so
that they can be remanufactured, refurbished or recycled
into new products. By doing this, a company can reduce
its dependence on externally sourced products, and the
materials they are made of. This can increase their resilience
to market disturbances. Remanufacturing or refurbishment
of used goods can also lower production costs, allowing
a company to make their products more affordable, while
keeping quality standards high. There are now numerous
companies offering reconditioned industrial machinery,
refurbished electronics and second-hand clothes.
S – Social drivers for circular business are linked to
understanding and addressing customer needs. For example,
people living in crowded city centres increasingly do not wish
to own a car, particularly where there is well developed public
transport system. As global populations continue to move to

cities, cars are becoming even more expensive and difficult
to park in many cities. Adding to this is a greater societal
awareness of the negative environmental and social impacts
of cars – particularly in cities. Existing norms and practices
for car ownership and use are being questioned in a number
of countries. But even concerned people would often like
(or need!) access to a car from time to time; for example, to
visit friends in the countryside. If given the opportunity, they
would only want to pay for the days or kilometres they are
using a car. Such social conditions and drivers help explain
the success of car sharing services in urban settings. The
focus on access rather than ownership also makes expensive
goods accessible to a broader range of customers.
Another social aspect of circular business models is that
they often entail service activities, such as maintenance,
repair or remanufacturing; and quite a number of these also
involve the development of online communities for sharing
knowledge and experiences. Such factors strengthen the
relationship between providers, customer and communities.
They also generate local employment.
T – Technology is also a key enabler – and the rate of
technological change at present is extremely high when
viewed in a historical perspective. Right now, many
technologies are being developed that will improve the
resource efficiency of production processes. For example, 3D
printing allows us to locally print fully customized products
and spare parts when and where we need them. This can
also remove the need to produce and store large amounts of
goods and parts that may never be used.
Digitization is a pivotal technology for circular business.
The new digital environment supports a broad range of
platforms that connect suppliers of goods and services to
potential customers. Some services, such as access to music,
can now be fully dematerialized and delivered directly
through “the cloud” as a service.
E – For a range of customer segments, environmental
considerations can be an important driver when choosing
a product or service. Circular business models aim to keep
products and materials in use for longer. Reuse and recycling
can reduce waste, replace the extraction of new primary
materials, and reduce the need to produce new products
– and thus reduce material and energy use. By providing
information on the environmental performance of their
products, companies can both differentiate themselves
and make it easier for customers to make environmentally
conscious choices.
L – There is a strong link between environmental
considerations and legal drivers for circular business models.
Stricter environmental standards, policies such as extended
producer responsibility and higher recycling targets often
provide incentives to shift to more circular business models.
The extension of legal product warranty periods can also
contribute to design improvements to make products more
durable and easier to repair.
circular business models | Circular Economy 28
2.5 BARRIERS FOR BUSINESSES IN
THE CIRCULAR ECONOMY
• Companies face a range of barriers when attempting
to apply circular thinking to their organization.
• When factors are categorized correctly, the PESTEL
framework is useful for the identification of societal,
environmental, political, economic, and technological
barriers to the establishment of circular business models.
• When using the PESTEL framework to identify barriers,
internal as well as external issues are considered.
Having posed a range of drivers, it is reasonable that a
question be posed: Why aren’t all companies transitioning
to circular business models if there are so many good reasons
to do so? The simple answer is that companies may also face
a range of barriers when trying to apply circular thinking to
their organization.
These barriers are often dependent on firm size, location,
and product or service. In this application of the PESTEL
framework, internal issues are also considered. This is largely
in recognition of the fact that many structures within the
firm – as well as external to the firm – have been formed over
time to suit traditional ways of business.
Examples of barriers that are internal, meaning they are
driven from within the firm, can include things such as the
way that a company judges the value of an investment. For
example, there may not be established practices to fairly judge
the value offerings. Constraints can be external, meaning
that the difficulty in building a new system or practices comes
from outside the firm. For example, in the form of regulatory
or policy-related structures that disadvantage a new set of
circular economy initiatives.
Again, we can compare the PESTEL framework to a
range of commonly observed internal and external barriers
to circular business models in order to demonstrate the
application of the tool.
P – Policies, legislation, or regulations may influence a firm’s
ability to implement a circular business model. These types
of political barriers are most often external and dependent
on the location of the firm.
Existing policies that incentivize recycling, incineration,
or disposal over other circular strategies, such as reuse
and refurbishment, have real potential to negatively affect
firms looking to base their value proposition on product
life extension. Recent research from the Information and
Communication Technology (ICT) field provides several
tangible examples. A first is how existing extended producer
responsibility policies can create competition between ICT
reuse organizations and recyclers or manufacturers. A system
has been built to support recycling in the face of waste
problems but with new market activities focused on reuse,
the two systems may well be set up as competitors.
Tax and labour regulations can also make it challenging for
firms to make the business case for repairing, refurbishing or
29 Circular Economy | circular business models

remanufacturing products, as these activities can be labour
and cost intensive.
Policies are usually country specific, so firms wishing
to expand internationally must comply with all relevant
regulation and provide documentation, which can be a
challenge, especially for smaller firms.
E – Greater upfront investment, higher costs, and return on
investment uncertainty are three main types of economic
barriers faced by firms attempting to transition to more
circular business models.
Many circular business models require greater upfront
investment, influencing a firm’s cash flow and lengthening
the time of return on investment. In addition to these
expenses, circular business models may also require additional
resources, leading to higher costs. Undertaking activities such
as repair, refurbishment, and remanufacturing often means
an increase in firm resources, including additional skilled
employees. And in countries with high taxes on labor, firms
may find it difficult for this to be economically feasible.
Like any business model innovation, circular business
models do not guarantee a return on investment.
Remanufacturing and resale of existing products may
cannibalize new product sales. External economic factors
like high costs associated with product take-back, or the
low price of virgin materials, may also discourage firms from
implementing circular business activities.
S – On the social side, success of circular business offerings is
shaped by consumer acceptance. Customers’ desires and pre-
conceived notions largely influence their willingness to adopt
circular offerings. Customers may for example purchase a new
product over a remanufactured product if they believe the
remanufactured product is inferior. For example, depending
on the type of product, some consumers may have concerns
about data security or hygiene when products are reused.
In many cases, consumers are open to circular offerings
but are simply unaware of their existence. As a result, many
organizations and governments have moved to create more
awareness of such business opportunities.
T – Technical barriers can and do hinder a company’s ability
to adopt circular offerings. For example, it may not be
technically possible to reuse, refurbish, or remanufacture
existing products to meet current performance demands.
There are also often concerns about the technical
performance properties of materials that have been recovered
and recycled.
E – Circular business models must contribute to the cycling
of products and materials and replace primary production
in order to contribute to environmental sustainability but
there is still uncertainty in some situations. Even though it is
expected that environmental benefits dominate studies have
shown that this is not guaranteed, and there can be situations
when circular offerings do not deliver environmental benefits.
Such uncertainties have been observed to slow the adoption
of circular business models.
L – Like many of the barriers previously discussed, legal
issues surrounding adoption of circular business models
differ from country to country, and can also differ according
to firm location and type. In circular business models where
product ownership is not transferred to the customer,
firms must internalize legal risk – for example, taking on
some liability for performance. As a consequence, some
companies may hesitate to extend responsibility from
beyond point of sale. The potential for legal action from
other firms can also act as a barrier to circular business
models. Intellectual property and other design rights may,
for example, hinder or limit companies from reusing other
firm’s products.

AUTHORS and PRESENTERS CHAPTER 2: CIRCULAR BUSINESS MODELS

2.1 THE ROLE OF BUSINESS IN THE CIRCULAR ECONOMY Nancy Bocken – IIIEE, Lund University, Sweden.
2.2 CIRCULAR ECONOMY BUSINESS MODEL STRATEGIES Julia Nußholz – IIIEE, Lund University, Sweden and Jeroen Gillabel, Sustainable Materials
Management, VITO, Belgium.
2.3 BUSINESS MODEL INNOVATION Jeroen Gillabel – Sustainable Materials Management, VITO, Belgium and Julia Nußholz – IIIEE, Lund University, Sweden.
2.4 DRIVERS FOR ENTREPRENEURSHIP IN CIRCULAR ECONOMY Saskia Manshoven – Sustainable Materials Management, VITO, Belgium.
2.5 BARRIERS FOR BUSINESSES IN A CIRCULAR ECONOMY Katherine Whalen – IIIEE, Lund University, Sweden.
 3
circular design, innovation and assessment | Circular Economy 30

Circular Design,
Innovation and Assessment

This chapter presents functional materials,
ecodesign approaches, and methods to as-
sess environmental impacts.
3.1 MATERIAL SCIENCE INNOVATIONS
• Humankind has always developed new materials,
but the rates of new design and synthesis – and the
number of applications for materials – have rapidly
accelerated in recent times.
• Modern demands are stimulating new waves of in-
novation – and increased circularity also places new
demands.
• Traditionally non-degradability and eco-toxicity was
largely ignored in material design, but now this has
increasing importance for society and it has great
implications for circularity.
The types of materials that have been available to society
have had enormous importance for the development of
societies. This fact is well recognized in human history, with
key epochs such as the bronze age and the iron age being
named after the key material of the era.
In the past, humans essentially collected “natural”
materials based on their suitability for specific functions,
or simple criteria such as strength, hardness and weight in
structural applications. However, the number and complexity
of selection criteria rose dramatically when people discovered
that the properties of natural materials can be altered
significantly by changing their structure. Importantly, we
learned how natural oxides like iron oxide (commonly known
as rust), can be extracted into relatively pure metals, in this
case iron.
Understanding that metals can be cast, cut and shaped
into specific final products was a huge step forward in
material engineering. We also learned that strength can
be increased and other properties altered dramatically by
mixing one element with others, and such mixtures became
known as alloys. For instance, bronze is an alloy of copper
and zinc, while steel is an alloy based on a mixture of iron
and carbon. In essence, the advancement in making new
structural and functional materials in this way was the
beginning of an industrial revolution. It was a paradigm shift;
instead of collecting natural materials and relying on their
natural properties, we began designing and synthesising our
own materials. The sophistication of modern engineering
technologies now allows the fabrication of a large variety
of man-made materials that can fulfil a larger number of
selection criteria simultaneously. The material selection
criteria of today have expanded from the functions of
materials alone to also include the characteristics of
fabrication technologies, their cost, and the availability of
natural resources.
Today, we can fabricate materials that range from oxide
ceramics and semiconductors, to metals and polymers, to
composite and hybrid materials, and even to living biological
tissues. The advances have great significance for parameters
such as functionality and resource efficiency. For example,
new strong lightweight material-based structures allow
aircraft to fly further and faster while using less fuel, and
even allow them to reach space. New semiconductors now
provide clean solar electricity, and new composite materials
form the vanes of the turbines used to generate power from
the wind. These are just a few examples of how society can
benefit from materials innovation.
 circular design, innovation and assessment | Circular Economy
However, a common side effect of fabricating artificial
materials is significantly reduced ability to decompose or
degrade naturally within a reasonable period of time. When
we invest a lot of effort into materials taken from nature in
order to tailor their properties, it also oftentimes embeds
a need to apply additional effort to make the materials
safe if they are to be returned to nature. This effect has
been ignored by society for a very long time. However, as
modern scales of production grow along with population and
consumption, the pollution arising from discarded complex
materials has grown to levels that pose an existential threat
to ecological systems, human health, and society in general.
As a result, it has now come into the technological spotlight.
Of course, there are alternatives to the discarding of
materials. Instead, additional effort can be applied to make
the materials suitable for their original functions again, thus
closing material cycles and reducing overall consumption
and pollution. This brings us to a more circular society where
material technologists face new challenges. While the
fundamental challenge is to continue innovating to provide
new materials with improved functionality, an increasing
demand is to deliver materials that are also recyclable. This
defines a new paradigm for materials engineering where
materials that both deliver a function desired by society
and are recyclable are increasingly preferred. Beyond
demands that materials be “environmentally friendly” or
“recyclable”, the capacity to be a chain link in the emerging
circular economy is becoming crucial in material design and
selection processes.
This situation is well illustrated by the use of materials
in the transportation industry, particularly in car bodies.
Steel was an unrivalled structural material until the late
1970s when demands to reduce vehicle weight became
stronger. An underlying reason at that time was to decrease
(expensive) fuel consumption. This effort was later reinforced
by demands to reduce CO2 emissions. These factors spurred
the replacement of some steel body components with light-
weight alternatives – and consequently many non-load-
bearing panels have been replaced by plastics. More critical
components were replaced gradually by aluminium, then
by magnesium alloys, and now increasingly by carbon-fibre
composites as well. These special materials deliver significant
weight reductions. The use of aluminium alloys delivers
approximately 65% in weight savings, while magnesium and
carbon fibres save another 30%. But these light materials
have their own drawbacks, beyond the increased cost of car
production. These are related to the new material alloy and
structure complexity required to achieve such performance.
Both aluminium and magnesium as pure metals are very
soft, so performance targets are achieved by creating alloys
of each. For example, without special additions, magnesium
is notoriously difficult to fabricate – and it degrades too
quickly during service. Aluminium alloys are extremely
difficult – or simply too expensive – to recycle to their original
grades. Therefore, they are downcycled to lesser quality and
value products. New composites such as carbon fibres have
similar challenges.
32
This brings us to the most interesting part of this example.
The competition from light-weight materials has now
stimulated accelerated development of better-performing
steel grades. In this case, the weight savings are achieved
by reducing component thicknesses. In addition, steel
recyclability received an important stimulus as more valuable
possibilities for closing material cycle loops with steel were
recognized.
In turn, the revival of research in steel industries has
further stimulated the development of light-weight
materials. This has also created more demand for the
analytical capacities of sophisticated tools like electron
microscopy, synchrotron radiation and neutron scattering.
These tools allow us to design new materials satisfying the
dual challenges of improved functionality plus circularity.
Materials engineering thus has an important role to play
in creating pathways that bring the visions of the circular
economy to reality.
3.2 ECODESIGN STRATEGIES
• Product design strategies can be formulated to sup-
port circularity.
• There is a range of dilemmas to deal with and tradeoffs
to consider when pursuing circular design.
• It is important to match specific product design pro-
cesses to relevant circular business models.
Why ecodesign?
Ecodesign is an umbrella term that incorporates several
sub-strategies that companies can use to improve the
environmental performance of their products. Ecodesign
takes a product-centric view with focus on reduction or
elimination of environmental and human health-related
impacts and resource depletion. Smarter design can
increase the eco-efficiency of many products, for example
by reduction of materials and energy needed for production
or the use-phase energy consumption.
There are numerous reasons why businesses engage
with ecodesign. One is to comply with present or upcoming
regulations. Another is to reduce costs, for example by being
able to incorporate recycled materials. Businesses might
also attract customers willing to pay a premium price for
environmentally superior products.
Building on the idea of ecodesign, a product’s entire
life cycle could also be examined in the design phase when
designing for circularity. To help ensure the reuse of products
and their parts, products can be designed to align with the
value propositions of circular business models, which typically
include this.
Six design strategies
Researchers have identified six different circular design strat-
egies that may be chosen. Which strategy, or combination of
strategies, to choose is highly dependent upon the business
model being applied.
33 Circular Economy | circular design, innovation and assessment
Strategy 1: Design for attachment and trust – This design
approach encourages users to bond with the product and
can help extend product lifespan, as the user is less likely to
discard a product for which they have a strong emotional
attachment.
Strategy 2: Design for durability – Products are designed to
be durable, reliable, and have reduced likelihood of failure.
However, when defining a product’s durability, designers
need to also match the economic and stylistic life span of
the product. For example, it does not make sense in terms
of both cost and material resource consumption for one-time
use packaging to be extremely durable.
Strategy 3: Design for standardisation and compatibility
– This typically involves designing product parts to be
interchangeable and compatible with multiple products. This
enables repair and can extend the life of the product. When
compatible replacement parts are readily available products
may be more easily refurbished or reused. This can also help
reduce overall consumption as one product can be used for
different purposes. An example is where phones and tablets
can be charged with the same charger instead of each item
requiring a unique charger type.
Strategy 4: Design for maintenance and repair – This design
strategy extends product lifetimes by increasing the ease
of product maintenance. Repair for many products is often
time-consuming and in countries with high labour costs, it
can oftentimes be more expensive to repair a product than
purchasing a new one. Reducing the number of components
in a product, or simplifying how parts are joined – for example
by avoiding adhesives – can help companies decrease repair
time and cost. And, it can also enable users to more easily
repair things themselves. The availability of repair manuals
and spare parts is of course also a key enabling factor.
Strategy 5: Design for adaptability and upgradability –
Here, allowance is made for future product modification.
Functional updates can allow a product’s function to change
over time, such as a child’s high chair that can be turned
into a dining room chair as the child ages. Technical updates
such as the update of a computer with a new operating
system allow products to adapt to technological change.
Sometimes however, the speed of technological development
limits upgradability possibilities. Thus, the rate of technology
change in a product segment is a key factor for designers
to consider.
Strategy 6: Design for ease of disassembly and reassembly
– The design of products and parts so they can be taken
apart and reassembled not only enhances the reparability and
reusability of products and components, but also makes the
products easier to recycle.
Parallel strategies
In addition to these six strategies, two other strategies are
often discussed in parallel with circular design and sustainable
materials management. These are design for recycling and
design for dematerialisation.
Design for recycling focuses on using specific design
techniques that can increase the rate of material recoverability
in the recycling process. A prime example within this that
makes products easier to recycle is the avoidance of the use
of mixed-materials.
Finally, product design can also pursue dematerialisation.
Examples of approaches are the reduction of packaging or
the application of high performance materials that allow less
total material to be used, while maintaining or even improving
functionality. In some cases of dematerialisation, the product
may actually be replaced by a service – an approach that
typically consumes significantly fewer resources. One
example of this is the move toward streaming films instead
of producing DVDs or Blu-ray disks.
3.3 NANOTECH DEVELOPMENTS
• Nanotechnology development is creating man-made
structures at scales so small that advanced microscopes
are required to see them.
• Nano-structures and nano-materials offer improved
properties such as mechanical, electronic, optical,
thermal, strength, and density.
• Nanotechnologies offer new opportunities across a
wide range of disciplines, ranging from physics and
electronics to chemistry, biology and medicine.
The word “nanos” means “dwarf” in Greek, and many
people associate nanotechnology with something
that is small. This is true! A common definition of
nanotechnology is the generation and manipulation of
materials and objects with at least one dimension in
the size range of 1-100 nanometres. An atom has a
diameter of around 0.1 nanometre so nanotechnology
works with a limited number of atoms. This is different
from atomic physics, where only the single atom is
studied. Nanometre-sized objects and materials have
existed for a long time (many examples can be found
in nature), but to study them we first needed powerful
microscopes and other techniques. When these were
developed, people consciously started to study, design
and manipulate materials on the nanoscale and the field
of nanotechnology was born. In addition to small size,
interesting material properties arise on the nanoscale,
which is one of the key reasons behind the huge interest
in this technology. Many of these properties relate
to doing more with less, or are embedded in clean
technologies, or both. Hence, some applications will
play important roles in facilitating the circular economy.
How small is nano?
If a person of average height holds their hand somewhere
around stomach level and asks if anyone can estimate the
distance between her hand and the ground, it is very rare
that people would answer 100 centimetres. By far, the most
 circular design, innovation and assessment | Circular Economy
Figure 3.1. The relative size scale of macro-, micro-, and nanoscopic objects (reproduced with permission, US Department of Energy).[15]
common answer is likely to be “something like 1 metre”. This
is because most people are very used to measuring things in
metres: people’s height, how tall buildings are, how far away
a neighbour’s house is, and so on. It is even fair to claim that
millimetre scale, which is a 1000 times smaller than a metre,
or 10 -3 metres, is not something most of us have to think
about in our everyday life. Most of us know that the tip of a
pen is about 1 millimetre, but it is not very often we measure
everyday distances in millimetres.
Making the scale yet 1000 times smaller we reach the
length of micrometre (also known as microns), which are a
million times smaller than a metre or 10 -6 metres. Structures
measured in microns can still be seen with the naked eye;
for example, mites can be a couple of 100 microns across,
and human hairs are typically 50 microns wide, but often
microscopes are required to study micron-sized structures.
Other examples of micrometre sized structures are red
blood cells, around 8 microns wide and 2 microns thick, and
bacteria, which often have a size of between half a micron
to 5 microns.
But to reach the scale of nanometres we have to make it
yet another 1000 times smaller, which is a billion times smaller
than a metre or 10 -9 metres (Fig. 3.1). A common definition
of nanotechnology is the generation and manipulation of
materials and objects that consist of some components that
are in the size range of 1-100 nanometres. Structures on
the nano-scale can no longer be seen by the naked eye, so
advanced microscopes are needed. Two examples of nanoscale
objects from nature are viruses, which can be around 50-100
nanometres, and our DNA, which is 2 nanometres wide. Today
there are also many man-made structures with nanometre-
sized dimensions. A transistor, which is the core component
in our computers, consists of structures with nanometre
dimensions. Other examples include graphene, carbon
nanotubes, nanowires and nanoparticles, all with one or more
34
dimensions smaller than 100 nanometres. Although many of us
are familiar with some nanometre-sized structures, not many
of us can easily relate to and have an intuitive feeling about
the nanometre length scale.
To help put nanometres in perspective; consider a piece
of paper, which is 100 000 nanometres thick, and that
fingernails grow about 1 nanometre per second.
Nanomaterials: properties and applications
In addition to their amazingly small size, materials with
nanometre dimensions can have different properties
compared to larger pieces of the same material. This is
of course a major reason for the substantial interest in
nanotechnology. A natural consequence of nanostructured
materials is a much larger surface-to-volume ratio compared
to larger objects, which simply means that the surface plays
an important role. This is utilized in nanobiosensors, for
example, where binding of molecules to the surface of the
biosensor affects its electronic properties that generate a
signal, which can then be detected.
An important part of nanomaterial development is to
modify the surface of a material to give it specific properties,
and such modifications are often inspired by discoveries from
nature. An example is adhesive structures made without glue,
similar to the feet of a gecko. Geckos have arrays of millions
of microscopic hairs, or setae, on the bottoms of their feet.
Each seta ends in an array of nanostructures, called spatulae,
that function as a dry adhesive. A product that has the
potential to provide adhesion without toxic chemicals often
found in adhesives clearly has environmental implications.
It is not only the surface effects that are important for
nanomaterials. Graphene, for example, is a nanomaterial that
is made of pure carbon, and it exhibits completely different
properties on a nanoscale than larger forms of carbon.
Compared to these larger forms, graphene has different and
35 Circular Economy | circular design, innovation and assessment
better mechanical, electronic, optical and thermal properties,
and it’s also stronger and lighter. Nanomaterials like graphene
can be added to other materials to create composites with
improved properties compared to the pure material. There
are now many products that are made with graphene
enhanced materials so that they are stronger, lighter and
more flexible than traditional materials. Such nanomaterials
offer opportunities to do more with less – or in other words
they can contribute to narrowing material loops.
Nanomaterials can also be used in the design of new
electronic and optoelectronic materials. Since nanomaterials
have dimensions on the same order as the wavelength of an
electron, they exhibit quantum effects. One example is the
quantum dot, where the electrons can only move between
certain discrete energy levels that are closely related to the
size of the quantum dot. This means that quantum dots
will emit light of specific frequencies if electricity or light
is applied to them, a feature that is utilized in quantum dot
televisions – these offer much clearer and brighter colours
at significantly lower energy consumptions. Other types
of nanostructures where quantum effects can be used are
carbon nanotubes, graphene and nanowires. These make
it possible to create new types of transistors, light emitting
diodes, lasers and solar cells – these applications all have
important roles to play in technologies required for resource
efficient and clean development.
Nanotechnology is not only interesting to material science;
in the field of medicine, for example, people hope to use
nanotechnology to create faster diagnostic tools, directed
delivery of pharmaceuticals and improved levels of contrast
in medical imaging.
In addition to its very, very small size and its special
properties, the third thing to remember about nanotechnology
is that it is a truly multidisciplinary field, ranging from physics
and electronics to chemistry, biology and medicine.
Nanotechnology and the circular economy
Nanotechnology is sometimes referred to as “crafting with
atoms”, which basically means building up materials atom by
atom. It is a bottom-up approach that mimics natural processes,
for example how a seed eventually grows into a large tree.
The conventional manufacturing approach, the top-down
method, works in the opposition way. This starts with bulk
material, from which the desired structure may be carved
or etched out. The bottom-up approach can lead to a more
efficient use of materials and less waste, and is therefore a
promising way to help narrow material loops.
In the production of nanoparticles and nanowires, it is
easier to use a top-down approach where we start with a
large piece of material and grind it down to nanoparticles.
But with this technique, a lot of waste material is created, it
requires a high energy input, and there is very little control
over the final size of the nanoparticles. In comparison, there
is a bottom-up approach to creating nanoparticles with a
physical method called aerosol generation is applied. This
approach starts with a small piece of bulk material that is
evaporated in a carrier gas; this can be done by a laser, in
a furnace or with a spark or arc process. This vapor is then
transported away from the hot zone by the carrier gas, and
starts to form a nucleus, which continues to grow in size
into nanoparticles. The size of the particles can be carefully
tuned, and the carrier gases can be recycled and reused.
The small amount of waste that is created is in the form
of material condensation on surfaces in the system, and
it can be easily collected and recycled. This makes aerosol
generation a more efficient process than the top-down
approach.
Semiconductor nanowires are rod-shaped, one-
dimensional structures with a nanoscale diameter and they
have the potential to radically improve future electronic
devices. The top-down approach to create these rods is to
start with a bulk piece of the semiconductor crystal and
etch out the nanowires, which is not the most material
efficient way and often results in nanowires of lower quality.
The bottom-up approach is to grow the nanowires atom
layer by atom layer in a process called epitaxy. Instead of a
thick bulk semiconductor, the process starts with a thin
semiconductor substrate where either seed particles or a
mask is deposited. After that, the growth material is
supplied and the nanowires are formed under the seed
particle or in the hole in the mask, atom layer by atom layer.
Another production technique that can be even more
 circular design, innovation and assessment | Circular Economy 36

Alloying Growth 530° C Cool-down

TMGa 400° C 130° C
Au NPs

GaAs NWs
TESn
AsH 3

TERM IN SCHEMATIC NAME / DESCRIPTOR CHEMICAL FORMULA

AuNPs Gold Nanoparticles Au
TMGa Trimethylgallium Ga(CH 3) 3
TESn Tetraethyltin (CH 3 CH 2) 4 Sn
AsH 3 Arsine AsH 3
GaAs NWs Gallium Arsenide Nanowires GaS
X Sn Ratio TESn/TMGa

Figure 3.2. Simplified schematic of a continuous gas phase production (Aerotaxy) system to produce Gallium Arsenide
Nanowires (modified from [16])

material efficient is an aerosol process called aerotaxy. Here
the nanowires are grown in a gas stream, with only a seed
particle to initiate the growth. The two main advantages of
aerotaxy are that the nanowires are grown in a continuous
process, and that there is no substrate, making for extremely
material efficient production (Fig. 3.2).
In addition to narrowing material loops, nanotechnology
can also help slow material loops, by prolonging the lifetime
of products – for example using coatings enhanced with
nanoparticles. There are nano-based coatings that can make
a structure withstand wear better, or make it more resistant
to corrosion.
There are also coatings that can make surfaces super
hydrophobic. This property creates surfaces that resist water,
where tiny micro or nano structures prevent water droplets
from wetting the surface. Such technology can be used
to create self-cleaning materials, and indeed they actually
function in a way similar to a lotus leaf. When it rains, the
water droplets will collect any dirt stuck on the surface and
run off, instead of fastening on the surface. A surface that
cleans itself has the potential to save important resources
over its lifetime.
Nanomaterials can also be used to extend material lifetime.
One example is self-healing materials, that are designed to
heal themselves from thermal or mechanical damage, with
full or partial recovery of their mechanical strength. Common
types of self-healing materials are based on polymers that are
designed to self-heal their broken bonds. Among different
promising materials, researchers have developed both self-
healing rubber and self-healing glass.
The research on nanotechnology-based materials has
grown significantly in recent years. And there is a wide variety
of different applications where nanomaterials can have a
huge impact; this area of material science is considered likely
to offer much to the circular economy.
3.4 ASSESSING THE ENVIRONMENTAL SUSTAINABILITY
OF CIRCULAR SYSTEMS: TOOLS AND METHODS
• Circular systems do not lead to environmental im-
provements by default.
• Environmental life cycle assessment can be used to as-
sess whether a new product or process can contribute
to a more sustainable society.
• LCA practitioners face several challenges when it
comes to assessing circular systems, with recycling as
a prime example.
Introduction to life cycle analysis
Just because a product is circular does not necessarily mean
that it is sustainable, and innovations with new materials may
improve some environmental characteristics, but not others.
Tools need to be used to assess whether or not a new product
or process can contribute to a more sustainable society.
Let us examine a situation where a company wishes to
assess the environmental impact of its newly developed
circular product system. They need to analyse the product
in a structured way, so that they can better understand its
environmental impacts, and evaluate if it is actually more
environmentally sustainable than the current alternative.
A first step is to examine the process level to see if this
process consumes more or fewer resources or emits more
or fewer emissions than a non-circular alternative (Fig. 3.3).
When doing so, efforts are made to quantify all the inputs
such as electricity, water and chemicals, and all the outputs
such as effluents and emissions arising from processes. To
assess the impact of a process on the environment, one can
apply a risk assessment method. This assesses the potential
for impact of emissions in the environment surrounding the
process plant. To assess the impact of a process on resource
use, it is possible to perform an efficiency analysis, such as an
37 Circular Economy | circular design, innovation and assessment

EMISSIONS

Emissions to air Emissions to soil Emissons to

(CO2 , CH 4 ...) (heavy metals...) water (nitrate,
phosphate...)

RESOURCES

Electricity
Water Process Product
Chemicals

Figure 3.3. Resource inputs and emissions in a process.

energy analysis, which will provide insights on the resource Environmental LCA
efficiency of a process. Life cycle assessment is a process framed by ISO standards,
Such work provides a basis for analysis, but the possibility which define the four steps of an LCA (Fig. 3.5).
always exists that the energy or material inputs needed in The first step in an LCA is to define the goal and scope of
order to make the product may have a higher impact on the the assessment. The goal includes the intended application,
environment than inputs used in the non-circular alternative. the reason for the study and its intended audience. The scope
These cannot be seen when focusing at the process level.
Therefore, analysts must look at another level called the life
Landfill Raw materials
cycle level. This level is analysed by conducting a life cycle
extraction
assessment (LCA). A life cycle assessment accounts for all the
resources consumed and the substances emitted during the life
cycle of the product, rather than only considering the process Disposal Recycling
of producing the circular product. Resources can be energy
carriers like electricity and fuels, or materials and chemicals.
Emissions can be greenhouse gases emitted to air, and
effluents can be phosphate contributing to water pollution.
The assessment starts from natural resource extraction Reuse
Use Production
and ends at the final stage of a product’s life. The end of life
stage can include options such as reuse, recycling or disposal
(Fig. 3.4).
Life cycle assessment is the most commonly used method Transport
to assess the environmental impact of products and services,
Figure 3.4. An indicative life cycle.
and it is framed by two standards from the International
Organization for Standardization, ISO standards 14040 and
14044. These standards provide a generic framework for Goal and
LCA that ensures that every practitioner follows the same scope definition
approach, assuring the quality and the comparability of the
studies.
The confidence of the scientific community, industry
and policy makers in LCA is growing and the insights that it
Inventory analysis Interpretation
provides to support decision-making is widely acknowledged.
Because of this, LCA is now applied in many ways: for
product comparison; product design and improvement; for
ecolabelling, and in the public sector to define policies. It
is important to note that LCA has been mostly developed Impact
to assess the environmental dimension of sustainability. assessment
However, increasingly, attempts are being made to account
for economic and social dimensions too. Figure 3.5. Steps in an LCA analysis.[17] [18]
 circular design, innovation and assessment | Circular Economy
Goal and scope
inventory analysis
includes the selection of the product for assessment (be it
a physical product, or a service), its functional unit, and the
system boundaries of the product’s life cycle.
A functional unit is a certain measure of the amount and
the quality of service delivered by the studied product. In
other words, the functional unit is a measure of product’s
function. The choice of a relevant functional unit allows
consideration of different characteristics including the
durability of a product. This is important when establishing
the amount of product(s) needed to deliver a chosen
amount of service. Note that delivering a service is the
actual function of a product! Choosing a functional unit
is not always straightforward and can have a large impact
on study results. For example, when comparing two light
sources (lamps), their light output as well as their lifetimes
might differ. So rather than comparing one lamp to one lamp,
the functional unit might be the light output (lumens) over
a certain amount of time. Similarly, comparing one kitchen
blender with another may not be the most suitable way of
comparing their performance. Instead, considering hours of
use as the functional unit may be more appropriate. So it is
very important to remember that the functional unit should
reflect the real value and functionality of the product.
The system boundaries of the product’s life cycle define
the processes of the life cycle that are to be included in the
analysis, and for which data will be collected. In theory, the
complete life cycle of the product could be included in the
system boundaries, from cradle to grave. But often only a
38
Impact assessment
Interpretation and reflection
part of the chain is covered, mostly from resource extraction
until the factory gate. In this case, the use and disposal of the
product are excluded. When making a comparison between
two products, for example an innovative circular product
versus the current alternative, it is important to make sure
that the same steps in the life cycle are included for both
products.
The second step of an LCA is an inventory analysis.
This consists of inventorying all inputs that are used
along the product’s life cycle (such as raw materials and
energy), and the resulting outputs (such as by-products
and waste). Data can be collected based on measurements,
information received from companies, literature, modelling,
and more. As this data collection can be quite labor and
time-intensive, databases have been created to provide the
life cycle inventory data of certain products. For example,
if a product requires 1 kilowatt-hour (kWh) of electricity
for its production, databases can provide the complete life
cycle inventory for electricity from resource extraction via
generation activities through to delivery of the electricity via
power grids. Data quality may vary rather significantly so it is
important to always validate the data chosen by comparing
it with literature, or similar studies.
The third step of an LCA is the life cycle impact assessment.
It translates the inventory into an estimate of the impact on
the environment by multiplying the amounts of emissions and
resources consumed by a characterisation factor. However,
the various flows that have been inventoried do not have
39 Circular Economy | circular design, innovation and assessment
Life cycle Characteriza-
inventory value X tion
factor
25 kg CO 2 1 25 kg CO 2 equivalent
3 kg CH 4 X 25
...
...
Figure 3.6. Inventory values, characterization factors and impacts.
the same effect on the environment. For example, carbon
dioxide and methane emitted to air contribute to climate
change while phosphate emitted to water contributes
to eutrophication of water bodies. These environmental
concerns are called environmental impact categories, and
for each impact category, characterisation factors are defined
for each contributing flow.
The example of the impact category climate change
can be used to demonstrate differences within an impact
category. A wide range of substances like carbon dioxide,
methane and nitrous oxides contribute to climate change,
but they do not all have the same potency in their
contribution to the warming effect upon the climate. Their
potency is usually compared to the one of carbon dioxide,
which is defined as a reference substance. For example,
the potency of methane to contribute to climate change
is known to be some 25 times higher than carbon dioxide
(CO 2), so its characterisation factor is 25 kg CO 2 equivalent
(CO 2 -eq) per kg methane. The amounts of greenhouse
gases emitted by the product system are multiplied by
their associated characterisation factors to obtain the final
impact of the product (Fig. 3.6).
Such calculations are performed for all impact categories.
In practice, environmental impact assessment is usually done
using a software tool which assigns the different flows of
the system to the impact categories that must be studied
for the product.
The last step of an LCA is the interpretation of the
results. During this step, analysis is performed to find
areas where improvements may be possible, or to support
recommendations for the most environmentally desirable
product in the case of a comparison. This is also where an
analyst can suggest design modifications to improve the
environmental performance of a product. Here it is also
necessary to critically interpret the results of the study by
taking into account the limitations of LCA, and reflecting on
the assumptions made when performing the analysis.
It is important to keep in mind that in each of these four
steps, important and sometimes even subjective choices have
to be made. All of these influence the final outcome in some
way and need to be clearly communicated.
= Impact
= 75 kg CO 2 equivalent
...
Total: 100 kg CO 2 equivalent
Limitations and assumptions of LCA, software tools,
and life cycle thinking (streamlined LCA)
Limitations of LCA
Though LCA is the most recognized tool to assess the
environmental sustainability of products and services, its
limitations should be recognized while interpreting the results
of an assessment.
One important aspect is the subjectivity of the choices
that need to be made at several steps of an LCA, including the
definition of the functional unit and the approach selected
to deal with multifunctional issues. Some products may
also have multiple functions or the same materials may be
used for several products. This then requires making choices
about partitioning of the system to allocate processes (e.g.
by mass, economic value, etc.) or expanding the system
boundaries. Moreover, practitioners often lack data, or must
use more general data that is less representative of their
actual subject.
The conclusions of an LCA also depend on the impact
categories that are analysed. Take the example of a
comparison of the environmental sustainability of product
A and product B. The carbon footprint of product A might
be higher than product B, while its eutrophication potential
might be lower. If only one impact category is analysed,
the conclusions and thus the measures resulting from the
analyses (e.g., change of consumer behaviour) might be
different as well. Practitioners must keep such issues in
mind and understand that there is no single complete impact
assessment method or combination of indicators.
All of these issues need to be dealt with and kept in mind
when conducting an LCA. It is important for all to recognize
that while the results of such studies have real value and
support decision-making, the respective outcomes must
be regarded as estimates. Thus, despite the uncertainties,
these assessments provide valuable information for decision-
making and product stewardship. They allow environmental
issues to be evaluated strategically, throughout the entire
product life cycle. The challenge is to take advantage of these
valuable features of life cycle assessments while bearing the
uncertainties in mind.
 circular design, innovation and assessment | Circular Economy
Life cycle thinking
Figure 3.7. A spectrum of life cycle analysis.
Software for LCA
Since conducting an LCA is a time-consuming task, software
programs have been developed to help in this matter.
Simapro (simapro.com) and OpenLCA (www.openlca.org),
which are freeware, are two examples. In these programs,
databases and different impact assessment methods can
be developed. Through the software interface, life cycles,
optionally linked to the database, can be constructed and
their impacts assessed.
Streamlined life cycle assessment
The use of life cycle studies falls along a spectrum that runs
from a level where practitioners pursue a complete spatial
and temporal assessment of all the inputs and outputs over
to the entire life cycle (which may never be accomplished in
practice due to effort and expense) to efforts that constitute
only an informal consideration of the environmental stresses
that occur over a product or process life cycle. This spectrum
is illustrated in Figure 3.7.
The further a study positions itself to the right side of
the spectrum, the more expensive and time-consuming
the study will be. An analysis that includes an inventory of
all inputs and outputs and all life cycle stages (including
an assessment of which ones are significant enough to
be included in the inventory), an impact assessment, and
an improvement analysis can be considered a life cycle
assessment. A study that falls to the left in the spectrum
of complexity will be said to involve the use of life cycle
concepts.
Studies in between the two extremes are referred to as
streamlined life cycle assessments. Streamlined life cycle
assessments are conducted in order to provide insights
into the most important life cycle stages, or type of
inputs and outputs, in a product life cycle. These stages,
inputs, or outputs may then be targeted for more detailed
study. Also, they can be used to identify where the most
significant environmental issues occur. The intensive data
collection process for a complete life cycle assessment
study is one of the main reasons why streamlined life cycle
assessments or studies with only life cycle concepts are
applied.
LCA challenges: recycling and multi-functionality
LCA practitioners face several challenges when it comes
to assessing circular systems. A high-profile example is the
case of recycling, which is a difficult issue to deal with in
a LCA but is also a key process in many circular systems.
40
Life cycle assessment
Recycling requires the re-processing of a material so it can
fulfil another service to society. A material may be recycled
to fulfil the same function as in its previous life, which is
called closed-loop recycling. It might also be recycled to fulfil
another function – often at a lower quality. This is known
as open-loop recycling. One common approach in LCA is
to assume that the recycled product replaces a product
produced from virgin raw materials. An example can be
taken from when a phone is designed so that the parts
and components can later be recycled into other products.
In this case, the benefit from recycling can be considered
by assuming that the system will avoid the production of
these other products from raw materials. An example is
given below, from a fictive case of the environmental impact
assessment of a new phone (Fig. 3.8.)
It can be seen that the impact of the phone’s production
(extraction of raw materials, transport, and manufacturing)
is 30 kg CO2 -eq per phone, the impact of the use phase is
2 kg CO2 -eq per functional unit and the recycling process is
3 kg CO2 -eq per functional unit (in total, 35 kg CO 2 -eq per
functional unit). Recycling the phone at its end of life enables
the recovery of its reusable materials, replacing the use of
raw materials like copper, iron, or zinc in future product
production. These raw materials have an impact of 10 kg
CO2 -eq per functional unit. Hence, the recycling withdraws
this impact from the phone production, use and recycling.
The total net impact of the functional unit is therefore
reduced to 25 kg CO2 -eq per functional unit with recycling.
35
30
Climate change (in CO 2 -eq per
25
new phone produced)
20
15
10
5
0
-5
-10
-15
Detailed contributions Net impact
Production of the phone Avoided products by recycling
Use Net impact
Recycling
Figure 3.8. Contributions to impact and net impact. Fictive
Example.
41 Circular Economy | circular design, innovation and assessment
It should also be noted that there is a subjective aspect in the
choice of the avoided products – it’s best to carefully identify
and make this clear to readers of the analysis.
Multi-functionality in LCA
Another important difficulty arises if a system (a collection
of unit processes) of the life cycle has more than one
function or, an output of two or more (co)products.
For example, the unit process of recycling of a phone
produces several products which can be used in different
applications. A unit process is a process life cycle system for
which there are quantified inputs and outputs. For example,
manufacturing of a particular material or electricity use can
be a unit process. Recycling of the product can also be a
unit process. It is important to decide how the flows and
impacts of the process (recycling in the case of the phones)
should be attributed to these co-products.
Different options exist to deal with this matter, although
there is no ideal solution. The three main options are:
• Subdivision of the considered processes into smaller unit
processes, of which none have more than one function
or, one product. This is often not possible for basic unit
processes.
• Partitioning (also termed allocation) of the process flows
and impact between the different functions or products
based on a certain partitioning coefficient, for example
mass or economic value. This latter coefficient is often
linked to a certain property/attribute of the co-products.
For example, partitioning can occur based on mass content.
In the fictive example where the recycling of the phone
results in 3 g of copper, 40 g of plastic and 2 g of zinc,
then the recycling process is attributed with a factor 3/45 to
copper, 40/45 to plastic and 2/45 to zinc. Priority is given to
partitioning coefficients based on physical attributes (e.g.
mass, energy content). However economic value is also
often used.
• Substitution (also called avoided burden approach) may be
performed. The approach is the same as when dealing with
the recycling issue described above. It is often applied in
LCA, as it is a way to avoid the partitioning coefficient
factor option that is often subjective.
3.5 ASSESSING THE RESOURCE
EFFICIENCY OF CIRCULAR SYSTEMS
• Achieving large resource efficiency improvements
compared to the current linear economy is a funda-
mental motivation for pursuing circular systems.
• There are several methods in common use for calcu-
lating resource efficiency.
• Well understood and agreed ways to evaluate the
resource efficiency of circular systems are important
for effective system design and management, and for
social acceptance of, and trust in, circular economy
initiatives.
Many parts of the world face a huge challenge related
to the supply and efficient use of resources. The global
population is growing and markets are becoming more
globalized, competitive and fluctuating. This makes it difficult
for industry to predict market prices and the availability of
valuable resources. This is the case for critical raw materials
– materials that are important for the economy and have a
high risk of supply disruption.
 circular design, innovation and assessment | Circular Economy 42

Domestic
extractions

Domestic
material Exports
Imports
consumption

Figure 3.9. Domestic supply, consumption and export of resources in Denmark.[19]

This challenge has become a priority for several countries

and regions around the world and many programs have
been launched to increase the self-sufficiency of nations.
Examples are the Resource Efficiency Program of the United
Nations Environment Programme (UNEP), Finland’s National
Resources Strategy and the Critical Materials Strategy in the
United States. In Europe, the European Commission launched
the resource-efficient Europe Flagship Initiative in 2011
and a Roadmap to an Efficient Europe. It presents several
milestones to be achieved by 2020 on the use of resources
such as minerals, metals, water, marine resources, land and
soils. The EU strategy places circular systems at the front line
of solutions to increase European self-sufficiency.
To encourage the development of such systems, the EU is
funding research and innovation programs such as the
Horizon 2020 (ec.europa.eu/programmes/horizon2020/en)
program. Horizon 2020’s call for projects explicitly states that
the new technologies or products developed should
contribute to increasing the resource efficiency of Europe. For
example, it states that project developers are expected to
increase “the resource and energy efficiency for the process
industries by at least 20%”, or to contribute to “gains in
productivity, in material and energy efficiency”.
Resource efficiency indicators at the macro level:
national and EU
While increasing the resource efficiency of the economy as
a whole is one of the core aims of circular systems, ensuring
such a result requires measurements. Apart from the fact
that measurement helps the management of such efforts, it
is also a vital input to avoid greenwashing, a practice that can
create doubt and distrust in consumers. It also helps prevent
unexpected side-effects that could negatively influence other
economic sectors regarding access to specific resources.
To measure progress at the European level, a system of
Using a Sankey diagram to analyze material flows
The Domestic Material Consumption can be estimated
for each country based on a Material Flow Analysis,
which consists of a thorough analysis of the fate of
materials within a defined geographic area. The
results of a Material Flow Analysis can be represented
in a Sankey diagram. Figure 3.9 is an example of the
Domestic Material Consumption of Denmark portrayed
via a Sankey diagram, where the flows of materials
going in and out of the country are estimated. The
materials that enter the Danish economy are those
that are imported into as well as extracted within
Denmark. They are represented on the left-hand side
of the consumption box, with the width of the arrows
proportional to the flow quantity.
The flows that leave the country are those which are
exported, as represented by the flow to the right of the
domestic consumption box. Hence, the DMC of Denmark
is the amount of materials imported and extracted in
Denmark, minus the amount of materials exported.
indicators called the Resource Efficiency Scoreboard was
developed in 2014. The Scoreboard is composed of a lead
indicator, dashboard indicators and thematic indicators.
Lead Indicator: The lead indicator is called resource
productivity and is calculated as the ratio of the Gross
Domestic Product (GDP) over the Domestic Material
Consumption (DMC). The DMC of each country and
therefore of the EU is derived from the analysis of material
flow accounts. It includes compilations of the overall material
inputs into a national economy, the changes of material
stock within the economy and the material outputs to other
economies or to the environment.
43 Circular Economy | circular design, innovation and assessment
Figure 3.10 shows the evolution of the DMC and the
GDP/DMC indicators of the EU during the last 10 years.
The resource productivity of the EU increased from 1.57 €/
kg to 2.07 €/kg of materials. This evolution shows a start
of the decoupling of resource use and economic output in
Europe. It might also be a consequence of the development
of circular systems in Europe.
It is important to maintain a critical stance when
interpreting these results. Even if it provides valuable
insights on the resource efficiency of the EU, this approach
has several limitations. First, it does not consider resources
such as water and land. Moreover, it does not follow a
life cycle perspective; i.e., it accounts for input and output
materials in terms of mass without accounting for the
amount of resources necessary to produce them outside
of the EU. To tackle this issue, tests are being made to
replace DMC with the Raw Material Consumption (RMC),
which will allow accounting for upstream resource
consumption.
In addition, this resource efficiency indicator can only be
used at the national level. When a research department or
a company wants to develop an innovative circular product,
resource efficiency indicators other than those defined at
the macro-level for Europe are necessary. Unfortunately,
there can be confusion about the term “resource efficiency”,
and companies can choose an interpretation and evaluation
method which favours their new product – a situation that
can lead to confusion.
It’s therefore important to understand the different
concepts behind the term as well as the ability to choose a
resource efficiency evaluation method in the most scientific
and objective way possible.
Dashboard indicators: These indicators have been
defined to complement the information provided by the lead
indicator. They focus on four areas of resource management:
materials, land, water and carbon.
• Materials – the indicator to follow this area of resource
management is the DMC, as used in the calculation of the
resource productivity
• Land – this area is followed by two indicators: the
productivity of artificial land, and the built-up areas. The
productivity of artificial land is calculated as the ratio of the
Purchasing Power Standard (PSS; see Eurostat glossary for
more information) over the area of artificial land in square
kilometres (km2). The European Commission is developing
a new indicator to better account for the efficiency of
artificial land management, especially by also accounting
possible deterioration of the environment. The built-up
area is defined as the total built-up area in a country in km2
and the total built-up area as a share of the total surface
area of land in the country. The evolution of these two
indicators for the EU as a whole over the past years is not
available due to a lack of data for some countries. However,
national data is available on the Eurostat website. In 2012,
urbanisation resulted in the loss of 52 000 km2 of natural
or semi-natural land, half of which is due to the demand
18 2.5
16
2.0
DMC (tons per capita)
14
GDP/DMC (€ per kg)
12
1.5
10
8
1.0
6
4 0.5
2
0 0.0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
DMC GDP & DMC
Figure 3.10. Evolution of the Domestic Material Consumption
and the resource productivity of the EU.[19]
for housing, services and recreation. The productivity of
artificial land varies a lot between countries, depending on
the type of economy of the countries (e.g., service-based
economy tends to consume fewer resources and thus land
to generate GDP). Luxembourg, the Netherlands, UK and
Germany show the highest productivity of artificial land
among the member states.
• Water – the follow up of water usage in the EU is done
by following two indicators: the water exploitation index
(WEI) and water productivity. The WEI is the ratio between
the mean annual total amount of freshwater abstraction
(public drinking, industrial and agricultural uses) and
the long-term average amount of available freshwater
resources. Therefore, high WEI indicates water stress. WEI
varies a lot between member states. The countries with the
highest WEI are Cyprus and Malta (severe water scarcity,
with a WEI over 50%) followed by Spain, Belgium and
Italy (water scarcity, with a WEI between 24% and 34%).
Other countries show no stress by water scarcity. Water
scarcity is highly related to the climatic conditions of the
countries, but not only. Belgium has one of the highest
WEI but this cannot be explained by climatic conditions.
One explanation is its high dependence on nuclear energy
which requires large amounts of water for cooling. Water
productivity measures the amount of economic output
produced (€ or PPS) per unit of water abstracted (cubic
metre or m3). It indicates how efficient member states are in
using the water resource. Luxembourg, UK, Denmark and
Malta are the countries with the highest water productivity
(between 788 €/m3 and 129 €/m3). The analysis of both
WEI and water productivity allows identifying the countries
that are the most efficient in managing water resource.
For example, Cyprus, Malta and Spain are among the
countries with the highest WEI. However, while the water
productivity of Spain is low, the one for Malta and Cyprus
are average to high, showing a more efficient management
of water. This can be due to different economic contexts,
(e.g., dependence on intensive agriculture, seasonality of
water use due to tourism, etc.)
• Carbon – indicators on carbon are sub-divided into four
indicators. The first indicator is greenhouse gas (GHG)
emissions per capita in tons CO 2 -eq. As previously
 circular design, innovation and assessment | Circular Economy
discussed, this indicator considers resources in the broad
sense, thus considering atmosphere as a sink to emissions
and as a resource to be preserved. The follow up of this
indicator shows a decrease in emissions over the past
10 years (-15%). Moreover, the level of emissions varies
between countries and seems to be linked to the type of
economy. Another indicator is energy productivity. It is
calculated as GDP over the gross inland consumption of
energy. Between 2000 and 2013, there was a 20% increase
in energy productivity, which varies from a 4% increase in
Austria to a 90% increase in Lithuania. The next indicator,
energy dependence, is the net imports divided by the sum
of gross inland energy consumption plus maritime bunkers
(he quantities of fuel oil used by ships operating under the
flag of a European Union country). It provides information
on the resilience of members states towards external energy
supply. From 2001 to 2013, the dependence of the EU
towards imported energy increased from 47.4% to 53.2%.
This is a major challenge for Europe as it means that the
EU is still subject to worldwide energy market fluctuation
and price volatility. The last indicator on carbon is the share
of renewable energy in gross final energy consumption.
Figure 3.11 shows that the share of renewable energy of
the EU increased 7% in 10 years and is heading towards
the target set by the European Commission for 2020, i.e.,
20% of renewable energy.
The lead indicator and the dashboard indicators are
complemented by 22 thematic indicators sub-divided
into sub-themes such as “turning waste into a resources”
(e.g., recycling rate of e-waste and generation of waste),
“supporting research and innovation”, “biodiversity” etc.
More information on the evolution of these indicators over
time can be found on the EU Resource Efficiency Scoreboard
report (available via the EU’s Eurostat portal: ec.europa.eu/
eurostat), which is updated yearly.
The European Resource Efficiency Scoreboard is a tool to
measure the progress of the EU as a whole as well as of each
member state regarding their resource efficiency. The lead
indicator provides an overall picture, which is complemented
and clarified by examination of the more detailed dashboard
indicators. Overall, the EU is making slow but steady progress.
This is considered to be due to the efforts put by the European
Commission to encourage research and innovation as well
as orientate national policies of the member states through
the publications of European directives. However, the
contribution that circular systems can still play to increase the
resource efficiency of the EU is tremendous and the further
development of new business models developing resource-
efficient circular systems is still required.
What are resources and what is resource efficiency?
The definition of resource efficiency starts first with the
definition of resources, specifically environmental resources in
this context. There are two ways of looking at environmental
resources: in the broad sense and in the strict sense. The
broad sense considers resources as inputs into a system but
also the environment itself as a sink; this perspective accounts
44
25%
gross final energy consumption
Share of renewable energy in
20%
15%
10%
5%
0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EU Target 2020
Figure 3.11. Evolution of the share of renewable energy in gross
final energy consumption compared to the 2020 target.[19]
Broad sense
Strict sense
Environment
“Input” entering an
as a resource
anthropogenic system
Figure 3.12. Defining resources in both the broad sense and
strict sense.[20]
for the environment’s role in absorbing emissions. Resources
defined in the strict sense only consider inputs specifically
entering an anthropogenic system, for example materials
consumed by a city, or water consumed at an industrial plant.
The broad sense is primarily used in a policy context and the
strict sense is mainly applied in industry and engineering, as
resource consumption is the starting point for all economic
production and consumption activities (Fig. 3.12).
For developers of new circular products, following the
strict definition of resources makes more sense. Of course,
even if it does not fall into the term of resource efficiency
evaluation, it’s important to evaluate the impact of emissions
on the environment. Coupling resource efficiency evaluation
with emission-based evaluation, such as risk assessment and
life cycle assessment, thus adds value.
Even when following the strict sense of resources, several
approaches that consider various types of resources are still
possible. For example, some approaches limit the definition
of resources to raw materials while others include energy
carriers such as electricity and heat. Moreover, some define
resources as objects from nature, which then excludes waste
– despite the fact that this could be used as a resource in
circular systems.
The definition of resources provided by the EU’s public-
private-partnership programme Sustainable Process Industry
through Resource and Energy Efficiency (SPIRE) Roadmap
(www.spire2030.eu) allows the inclusion of non-tangible
45 Circular Economy | circular design, innovation and assessment

Industrial production system

Foreground
Direct natural resources system Useful outputs/benefits
Natural
End users
environment
Background
Indirect natural system Processed natural
resources resources
Waste as resource
(secondary resource)
Waste as resource (secondary resource)

Figure 3.13. Resource consumption in an industrial system: gate to gate.[21]

Industrial production system

Foreground
Direct natural resources system Useful outputs/benefits
Natural
End users
environment
Background
Indirect natural system Processed natural
resources resources
Waste as resource
(secondary resource)
Waste as resource (secondary resource)

Figure 3.14 Resource consumption in an industrial system: life cycle perspective.[21]

energy carriers and waste as a resource by defining resources
as energy, raw materials and water. One major resource, that
is becoming more and more scarce around the world, is land.
This can also be defined as a resource. Considering land,
energy, primary and secondary raw materials and water yields
a much more complete vision of the resource use of new
circular systems.
Having thus clarified a picture of how resources can be
defined for work with circular systems, it is also a requirement
that a definition for resource efficiency be supplied. In
general, efficiency is defined as the ratio between the benefits
obtained from a process or system, and the efforts put into
this process or system. The indicator defined by the European
Commission to measure the resource efficiency of Europe uses
this ratio. There, it is the ratio yielded by dividing the benefits
obtained by Europeans from the use of resources (Gross
Domestic Product) by Domestic Material Consumption (the
amount of resources used). The calculation of the resource
efficiency of a system will also depend on the level at which
an analyst makes the calculation. Resource efficiency can be
calculated at different levels, from a single process unit to that
of a whole production plant, an entire industrial sector, or a
whole country. This system is called the foreground system. It
is an entity within the entire industrial production system and
is often determined and controlled by the analysts in charge
of a specific study. A foreground system consumes resources
directly extracted from the natural environment, such as water
from surrounding water bodies, as well as processed natural
resources such as electricity, and it delivers products and
services to end user (Fig. 3.13).
The resource efficiency ratio is then calculated as the ratio
of the benefits obtained from resources, in green, and the
amount of resources consumed in the foreground process,
in red. This approach is called the gate-to-gate approach.
Typically, an analyst can use this approach to calculate the
resource efficiency of a production process; for example, the
recycling process of metals recovered from a waste stream
to obtain new materials.
Another approach is to follow a life cycle perspective. In his
case, the denominator of the resource efficiency ratio will be
the amount of natural resources consumed along the whole
life cycle of a product. Typically, an LCA will be conducted to
calculate the denominator (Fig. 3.14).
The resource efficiency ratio then becomes the ratio of
the benefits obtained from resources over the amount of
resources directly and indirectly consumed from the natural
environment and from waste streams produced by the
economy.
While the first approach quantifies the denominator
by accounting for the amount of resources used by the
main production process, the other approach accounts
for all the resources consumed along the life cycle of the
product, from initial resource extraction from the natural
environment, to their use in the main production process.
These two approaches can give completely different results.
As an example of this, a study in the chemical sector,
 circular design, innovation and assessment | Circular Economy
showed that when comparing the resource efficiency of two
techniques to separate chemicals, the conclusion on which one
is the most resource efficient varies depending on the level of
Resource efficiency
evaluation chosen. When calculating the resource efficiency
of the techniques at the level of the process and the plant (the
two foreground systems), Technique A has a lower resource
efficiency than Technique B. However, when calculating the
resource efficiency at the life cycle level, Technique A is more
resource efficient than Technique B (Fig. 3.15).
Another factor that impacts results is the method chosen
to calculate the denominator of the resource efficiency ratio
(the amounts of resources consumed).
Methods available to quantify resources
The numerator of the RE equation; in this case, the benefits
obtained from resources, is often easier to quantify than the
denominator. Broadly speaking, this is because benefits are
generally delivered to end users and can often be expressed
in tangible units: kg, MJ, money, etc. However, this is not
always the case, especially when benefits have a social
function. The denominator requires additional calculations
and discussion. While there is no universal consensus on
exactly how this should be done, a classification of methods
to evaluate resource use in LCA according to two principles
has recently been proposed:
• a physical accounting of resources – the quantity of
resources consumed by the studied system is systematically
accounted for based on a physical property (mass or
volume, energy, exergy* * or area); or
• an assessment of the impact from resource use – this
is done by considering one of the following elements:
the amount of resources available in the Earth’s crust,
predefined targets, future consequences of resource
extraction, or willingness-to-pay (WTP).
Resources can be classified as renewable or non-
renewable and as biotic or abiotic as shown in Table 3.1.
(next page). Renewable resources are able to regenerate
within a human lifetime but can be exhausted if they are
consumed beyond their regeneration capacity. They can
be biotic (i.e., derived from presently living organisms;
e.g., wood) or abiotic (i.e., a product of past biological or
physical/chemical processes; e.g., air, wind, sunlight and
water). In contrast, non-renewable resources either cannot
be renewed by natural processes at all, or can only be
renewed over time periods much longer than a human
lifetime (e.g. metal ores, oil, coal, etc.) The methods used
to quantify resources do not all consider these resource
sub-categories in the same way.
Resource accounting methods
Resource accounting methods can be used in both gate-to-
gate and life cycle-based analyses (Table 3.1, next page).
Each method accounts for resources based on a specific
* Exergy relates to the quality of that energy and tells us how much is useful for doing work. While the laws of thermodyamics dictate that energy is never
destroyed in processes, exergy is always destroyed (i.e. quality degrades) in irreversable processes.
46
35
30
25
20
15
10
5
0
Process level Plant level Life cycle level
Technique A Technique B
Figure 3.15. Different resource efficiency calculations –
different results.[21]
physical property. Four main properties are considered by
existing methods: mass/volume, energy, exergy and area.
As resources have different properties, most resource
accounting methods do not necessarily account for the
same resources. For example, energy-based methods do not
account for water and land, whereas exergy-based methods
are considered to account for these resources. Similarly,
area-based methods neither account for non-renewable
material resources nor for abiotic renewable energy
resources. However, some area-based methods, such as the
Ecological Footprint (www.footprintnetwork.org), account
for bio-productive land necessary to absorb CO 2 emissions,
as well as for the amount of consumed nuclear energy
carrier. Moreover, some methods are only able to account
for a fraction of a resource category. For example, mass
accounting methods are not able to account for all energy
carriers, typically only wind energy and electricity. Current
exergy-based methods account for the largest number of
resources.
Impact assessment methods
Impact assessment methods are applied in life cycle-based
analyses (Table 3.1, next page). Similar to gate-to-gate analysis,
they do not all cover the same resources (for example,
some cover nuclear energy whereas other do not). Most
developed methods are derived from calculations using one
of the parameters detailed below – there are thus several
approaches classified.
• Quantity/quality of reserves: these methods take into
account the decreasing quantity and/or quality of
resources available in the natural environment. Thus, they
acknowledge that the consumption of resources has an
impact on resource availability. Methods based on the
quantity/quality of reserves are only able to account for
non-renewable resources.
• Distance-to-target: these methods compare the quantity
of resources consumed to previously defined targets. The
most used distance-to-target LCA method is called the
Ecological Scarcity method, which places the quantity of
47 Circular Economy | circular design, innovation and assessment

Table 3.1. Existing methods to quantify resource consumption and examples [19 ]–[ 21]

Scope Resource classification

Water Land Materials and substances Energy
Non-renewable Biotic Non-renewable Abiotic Biotic
renewable renewable renewable

Methods based on ... Examples of methods Gate-to-gate Life cycle Atmospheric Metals and Biomass Fossil Nuclear Flow energy Biomass
resources minerals energy energy resources
Accounting Mass or Material flow analysis X X X X X X X
methods volume
ReCiPe Midpoint X X
– Water depletion
EDIP 97/203 X X X
– renewable resources
Material Input Per X X X X X X
Service Unit
Energy Energy analysis) X X X X X X
CED/PED X X X X X X
AP – fossil fuels X X
Impact 2002+ – non- X X X X X
renewable energy
ReCiPe Midpoint X X
– Fossil depletion)
Exergy Exergy analysis X X X X X X X X X
CEENE X X (X) X X X X X X X
CexD) X X X X X X X X X
Area Direct land accounting X X
Ecological Footprint X X (X) (X) (X) (X)
Impact Resource ADP X X X
assessment reserves
EDIP 97/203 – non- X X X X
methods quality/
renewable resources
quantity
Distance to Ecological Scarcity X X (X) X X X X X X
target
Willing- EPS200 – land X X X X X
ness-to-pay occupation and abiotic
stock resources
Future Impact 2002+ X X
consequ-
Eco-Indicator 99 X X X
ences
ReCiPe Endpoint – X X X X
resources

Empty cells: resources not covered by the method; X: “biotic resources” are repeated for “Materials and substances” and for “Energy” as they can be materials or energy carriers;
(X): Indirectly accounted for.21, 22, 23

• resources that have been consumed in perspective with
political targets, or international policies, that concern
themselves with the flows and availability of materials
that have been classified as critical.
• Willingness-to-pay: these methods estimate the amount
of money people are ready to invest to restore damages
caused to natural resources. An LCA method that follows
this approach in its weighting step is known as the EPS
2000 method (www.lifecyclecenter.se) (weighting is the
optional final step in an LCA, which entails multiplying
results of each of the impact categories with a weighting
factor based on judgement of relative importance of the
impact category).
• Future consequences: these methods consider the impact
of current resource consumption on future parameters
such as a result of a decrease in the quality of ore in the
natural environment. The parameters most often applied
when applying these methods are based on the so-called
surplus energy or surplus costs calculated to be necessary
to extract the same amount of resources in the future as
are extracted today. An example of a method applying
surplus energy is Impact 2002+ while an example of a
method using surplus cost is ReCiPe Endpoint.
Some tips to calculate resource efficiency
Several choices need to be made when calculating the
resource efficiency ratio. These choices are subjective but
there are four things that project developers can pay special
attention to in order to make informed choices.
First, try to carefully define the numerator of the resource
efficiency ratio. It represents the benefits obtained from
resources. Thus it essentially defines the functionality of a
product. It can be done by taking into account the quality
and the lifetime of the products. This is the same principle
used in LCA studies.
Secondly, an LCA should always be performed to
calculate the denominator of the resource efficiency ratio.
For developers of a new circular product, the aim is to create
a product that has a solid business plan and contributes to
increasing the resource efficiency of the economy as a whole.
Life cycle thinking is the only approach that empowers this
goal. Gate-to-gate analysis is a limited approach but can be
very useful when calculating intermediary indicators and
integrating resource efficiency evaluation during the project’s
development.
Third, give attention to the resource coverage of the
method chosen to quantify the resources consumed. As
discussed above, each method covers different types of

resources. However, lowering the consumption of one
specific natural resource can induce higher consumption of
another. As an example, a recent study examined the
sustainability of two ways of converting algae grown on
aquaculture wastewater into a saleable product (also called
valorisation): valorisation as shrimp feed and valorisation as
biogas via anaerobic digestion. The study compared the
results of the resource efficiency ratio when the denominator
was calculated using three different methods: the CEENE
method of Ghent University in Belgium, the ADP method of
Leiden University, and the Eco-Indicator 99 method,
developed by the firm Pré Consultants (Fig. 3.16).
These methods do not cover the same resources, and
Figure 3.16 illustrates that choosing one over the other
changes the conclusion on which scenario is the most
CEENE
0,03 200
150
m3 kg Sb eq-1
0,02
m3 MJex-1
100
0,01
50
0 0
Shrimp feed
Figure 3.16. Resource efficiency of wastewater valorization: Three different resource efficiency ratios.[21]
circular design, innovation and assessment | Circular Economy 48
resource efficient. Therefore, one needs to consider a method
or set of methods that cover all resource categories: energy,
primary and secondary raw materials, land and water.
Finally, the integration of resource efficiency consider-
ations more systematically during the course of product
development can help project developers achieve higher
resource efficiency goals. However, a drawback in real-life
is that most project developers evaluate the resource effi-
ciency or even the overall sustainability of their products at
the end of product development; at this stage, the prod-
uct has already been conceived and there is little room
for improvement. Therefore, it may be more effective to
implement an iterative resource evaluation process during
product development, starting with preliminary indexes and
using more elaborate indicators at the end of the project.
ADP Eco-Indicator 99
50
40
m3 points-1
30
20
10
0
Biogas
49 Circular Economy | circular design, innovation and assessment

Simple indicators, such as gate-to-gate analyses, can be
conducted early as they require less time and data. An LCA
approach that doesn’t necessarily require quantification can
also be followed throughout the project, with a full life cycle
analysis conducted at the end.
Even though a universally applicable assessment of
resource efficiency and consumption impact does not exist,
these key methods can be used in product development
to calculate the resource efficiency of new products in the
most scientific and objective way. Such work is vital to
effective pursuit of the circular economy.
In this chapter you have learned about advances with
material sciences and assessment methods that can be used
to measure impacts and progress. It is important that all
assessments of circular economy initiatives consider systems
and life cycles.

AUTHORS and PRESENTERS CHAPTER 3: CIRCULAR DESIGN, INNOVATION AND ASSESSMENT

3.1 MATERIAL SCIENCE INNOVATIONS Dmytro Orlov – Materials Engineering, Faculty of Engineering, LTH, Lund University, Sweden.
3.2 ECODESIGN STRATEGIES Katherine Whalen – IIIEE, Lund University, Sweden.
3.3 NANOTECH DEVELOPMENTS Maria Messing – Solid State Physics and NanoLund, Lund University, Sweden.
3.4 ASSESSING THE ENVIRONMENTAL SUSTAINABILITY OF CIRCULAR SYSTEMS: TOOLS AND METHODS Sophie Sfez, Green Chemistry and Technology,
Ghent University, Belgium.
3.5 ASSESSING CIRCULAR SYSTEMS Sophie Sfez, Green Chemistry and Technology, Ghent University, Belgium.
 4
policies and networks | Circular Economy 50

Policies and Networks

51 Circular Economy | policies and networks

This chapter explores the role of governments and networks and how policies and sharing
best practices can enable the circular economy.

4.1 THE HISTORICAL PERSPECTIVE

• Severe material access challenges in Britain during

World War II were met with combinations of govern-
ment-led action – these included actions related to
circular economy approaches such as careful use of
scarce materials and the development of substitutes
using alternative materials.

• Over time, there has been a transition in governance

from command & control approaches to a multi-stake-
holder platform facilitation.

• A number of societal actors have also had to adopt

new roles as governance of waste has evolved towards
governance of materials.

Figure 4.1. Severe supply chain disruption to Britain during

Past policy solutions: scarcity and the case of WWII
Material shortages have always been a problem for societies
throughout human history. The technologies and the
materials may change, but the challenge of ensuring
material availability remains. Analysis of historic periods of
material shortages can help us understand the challenges
and develop new policies in the future. For example, Britain
experienced extreme material scarcity as a result of supply
chain disruption during the Second World War (WWII), and
they developed a variety of policies to help deal with the
shortages (Fig. 4.1).
Of course, many of the critical materials and technologies
we use today did not exist during WWII, and a wartime
material shortage situation cannot provide an exact blueprint
for circular materials policy today. Nevertheless, it is a
successful example of how society dealt with material access
challenges, and we may be able to learn from it.
WWII.
As the international situation worsened in the mid 1930’s,
and war looked likely, the British government developed
materials strategies in preparation, and a new Ministry of
Supply began operating in August 1939.
From the start, this department developed schemes to
deal with the expected changes in global materials supply.
Their approach included the careful use of scarce materials
and the development of substitutes using alternative
materials. Production was based on a system of priorities:
the higher the priority, the more material allocated. Legal
powers were also introduced to control prices, product
volume and product use, and government controls were
imposed on most materials.
One example is how furniture production was handled.
During this time, timber supplies were halved, many pieces of
furniture were lost in the bombing of towns and cities, and
 policies and networks | Circular Economy 52

1943 Utility Furniture Scheme – addressing Material Scarcity 2017 Circular Economy Package – including Critical Materials

Technical features 1943: Technical features 2017:

Less material than pre-war products
Robust and long lasting product, designed for repair
Specified materials, local where possible
Standardised designs and parts common across products
Complimentary but limited product range
No unnecessary decoration or ornament
Designs approved by government appointed committee
Material efficiency considered at all stages
Enhanced durability and repairability of products
Increased recyclability of products
Critical materials defined, EU insecurity tackled
Ecodesign work plan – standards on materials efficiency
The Eco-design directive used in the C E action plan
Use of EU directives and advisory committees

Production 1943: Production 2017:

Production location specified
Material quantities and timings allocated
Production licences required for manufacture
Labour allocated to all in the supplied chain
Early use controlled
Production volumes and timings given
Action on Green Public Procurement
Material efficiency in product production
Report on critical raw materials and the circular economy
Aim for jobs and growth in Europe
Focus on materials for low carbon energy production

Society 1943: Society 2017:

Only product range legally available for purchase Better enforcement of existing guarantees on products
Permits required, based on need, to access coupons Use of product environmental eco-footprint information
Coupons reqiured to purchase, fixed price
Products in catalogues not showrooms

Figure 4.2. Product design approaches to address materials scarcity in 1943 compared to the EU’s 2017 Circular Economy Package.[24]

second-hand furniture prices were rapidly increasing. This

fueled a growing black market, but the government was keen
to show they were in control of all aspects of the home front.
So they acted, and in 1942 they launched the Utility Furniture
Scheme. Figure 4.2 provides details of how this furniture
scheme applied a range of design principles that share many
parameters with modern circular economy design concepts.
Under this scheme a committee was formed that had
complete decision-making powers over the design of
furniture. To reduce material use they introduced a standard
furniture range; the design of this furniture was very tightly
controlled, and manufacturing firms had no freedom to
adapt the limited range of designated designs. Consumers
only had these designs as options to purchase (Fig. 4.3)!
The government selected the firms to make the furniture,
and timed production volumes with the allocation of raw
materials and location of market, reducing fuel used for
transport.
This case demonstrates that we can take on the potential
challenge of severe materials scarcity. It also guides us in
understanding the difficult choices we may have to make,
the policies we may want to enact and the policies we should
avoid. Britain saw over a 50% reduction in some material
supplies during WWII; the actions they took to successfully
manage their materials can provide us with both insights and
evidence of how to develop circular economy policy going
forwards.
It’s also worth noting the urgency of the British challenge;
in an emergency situation, we can take action to solve very
large challenges. Figure 4.3. Examples of British utility furniture from 1943.[25]
53 Circular Economy | policies and networks
From waste to materials
To better understand evolving policy frameworks for the
circular economy, it is useful to examine the recent history of
waste management policy in Western Europe. Policy follows
a wave-like pattern, with a steep increase in effort and
attention in the initial years. Over time, this effort levels off
as policies settle into place and are enforced and monitored.
As new policies develop, the pattern repeats itself (Fig. 4.4).
Before the 1970s, waste was managed locally, and
usually this meant it was collected and deposited in local
dump sites. This posed a risk for the environment and public
health. Waste management policy in the form of national
laws regulating collection and disposal emerged in the early
1970s as waste began to be considered a problem. The
authorities responded by developing a policy that was based
on containment and risk remediation to secure the health
of citizens. This command and control policy limited the
operation of landfills and their emissions. Sites that clearly
had negative impacts on the environment were forced to
close and remediate.
Incineration plants were initially considered as simply a
practical means of waste disposal, but over the years
awareness of the possible negative effects of flue gas
emissions on the health of surrounding populations grew.
As a result, incineration plants also had to begin monitoring
their emissions. The 1980s brought a new policy period with
the introduction of permit-based legislation with emission
limit values to water and air based on the use of best
available techniques (BAT). In many cases this led to the
closure of existing installations.
EU definition: “Best available techniques” means the
most effective and advanced stage in the development
of activities and their methods of operation which in-
dicates the practical suitability of particular techniques
for providing the basis for emission limit values and
other permit conditions designed to prevent and where
that is not practicable, to reduce emissions and the im-
pact on the environment as a whole.
Figure 4.4. Waves of waste policy in Europe.[6]
This second wave of policy was also driven by the sheer
volumes of waste. The authorities became aware of the
scale of the volumes of waste materials produced every year,
and also that many of these materials were recyclable, such
as paper, glass or construction and demolition waste. The
second wave aimed to extract these materials from the waste
stream and recycle them. This resulted in the introduction of
separate waste collection systems and recycling targets for
specific waste streams, in an attempt to reduce the overall
volume of waste produced.
The policy was characterized by collection and recycling
targets in the form of amounts or percentages. For
example, Flanders, in Belgium, has set a target of maximum
150kg residual waste per inhabitant, and since 2008 the
EU aims for 70% recycling of construction and demolition
waste. These targets led to unique collection strategies, in
which the high-volume materials were collected separately,
close to the point where they were produced. In general,
collection could be in the form of door to door collection
or via centralized collection systems. Centralized systems
were often applied for materials such as glass containers
or paper.
The second wave led to the development of waste
treatment facilities – as distinct from the earlier “dumps”.
These were also controlled by permit-based policy. In
addition, legislation increasingly controlled the shipment of
waste and regulated the treatment of hazardous materials.
In 2006, the European Waste Framework directive
introduced a waste hierarchy and set recycling targets for
2020 for implementation in each member state. The second

wave had resulted in the creation of a waste management
sector focused on collecting and recycling waste. Initially,
this activity was largely subsidized but as it grew it became
a private market activity. The introduction of the waste
hierarchy shifted the focus of recycling activities from
processing large volumes of waste towards the creation of
value – the third wave of waste policy.
As the third wave developed, it subsequently led to
a shift in focus from large volume, low value materials
to low volume, high value materials included in broader
societal waste streams, such as metals like copper or gold.
Typical of these streams are flows for used products such
as electronic waste or used cars. These types of material
flows need thorough processing in order to extract the
metals. Evolving to cater for such flows, waste treatment
activities became more complex and capital intensive. This
resulted in a tension between waste regulation and market
drivers for material recovery and recycling. Waste was
no longer necessarily processed close to the source, but
increasingly at locations of higher market price or lower
processing costs.
The fourth wave of waste management is underway, and
here is referred to as the wave of circular economy. It is no
longer only driven by the value or the recycling in itself, but
also by constraints on the stable supply of materials that are
important to our economies and technologies.
This enfolds the concept of critical materials, the idea
that our economy needs certain materials that will be more
expensive or harder to find as the global economy grows. This
wave is driving new policy, which looks not only at how we
can use more recycled materials, but also examines the use
phase of materials and products. It sets demands on societal
actors to increase the lifetime of products and keep materials
at a high value throughout their life cycle.
This fourth wave demands that the role of the policy maker
has moved from a controlling function in waste management
to an enabling factor in materials management and product
policy. Policy actions need to focus on waste prevention
and on the responsibility of producers, and this requires
an approach that stimulates evolution via communication
campaigns for consumers and the promotion of responsibility
amongst manufacturers and industry players.
In addition to the changing role of the legislator, it is inter-
esting to also review the changing role of the waste sector.
In the first wave, the waste sector was considered part of
the problem; their waste disposal activities required control
and limitation by the government. In the second wave, the
responsibility for treating wastes, and therefore limiting the
burden on public health and environment, shifted from the
authorities to the waste management sector. As owners of
the waste problem, they increasingly explored and developed
the possibility of recovering the residual value of the material
flows that they now controlled. This value capture began to
drive waste processing, so much so that primary producers,
and larger service companies, also became more interested
in waste management activities.
As a consequence, this stimulated the third wave, where
policies and networks | Circular Economy 54
small local waste treatment companies were taken over by
larger groups and major industrial players entered the market.
In the emerging circular economy, the distinction between
raw materials, products and waste is becoming increasingly
unclear. Material management is part of the product value
chain, and producers remain responsible for the product and
material that they place on the market. In leasing models
for example, the producers even keep the ownership of the
product and provide only a service to the customer. Such
developments will drive fundamental changes in the waste
sector, and existing players will need to continually redefine
their role in this complex system of material management.
4.2. POLICIES FOR A CIRCULAR ECONOMY
• Policy instruments have a very important role to play
in the shaping of future socio-economic regimes such
as the circular economy.
• There are a range of instruments available and in use
– and more are proposed to build a mix that can lead
a transition from the linear economy.
• At times policies can result in conflicts within a cir-
cular system and both care in design and monitoring
of performance is required to deliver effective policy.
Moving from a linear economy to a circular economy requires
fundamental changes to current production and consumption
systems. We have to change how materials are used and
how our products are designed, and we need new business
models. However, the circular economy also needs enabling
conditions.
If the goal was to be growing potatoes, then sunshine,
water, rich soil, and a lot of care would be enabling
conditions for growth. Enabling conditions for the
circular economy include the need for a supportive policy
framework. This needs to remove existing barriers in circular
operations and enable the increase of material circularity in
the economy.
There are a number of tools and approaches that
governments can apply to scale up the circular economy.
These include a wide range of policy instruments that can
be used to achieve certain goals. The most commonly used
distinguish between three types of policy instruments:
administrative, economic and informative.
Examples of administrative or regulatory instruments
include bans, standards, licenses and voluntary agreements
between government and industry. Economic instruments
can take the form of taxes, fees, subsidies and charges.
Examples of informative instruments are labelling, reporting
requirements, certification schemes, and awareness raising
campaigns.
All of these approaches can be applied in either
mandatory or voluntary forms. Mandatory instruments
are implemented and monitored by a central authority,
either at the local, national or international level, and
voluntary instruments are typically self-regulated among
the participating organizations. (Table 4.1)
55 Circular Economy | policies and networks

Table 4.1. Categorization of policy instruments – with examples.

Mandatory Voluntary

Administrative bans, standards, quotas, licences, etc. standards, agreements between government and
industry, etc.

Economic taxes, fees, tariffs, subsidies, etc. GPP, loan guarantees, charges, etc.

Informative reporting requirements (chemicals), labelling, certification schemes, awareness raising campaigns,
education, etc. EMS, etc.

Examples of the three types of policy instruments, organized by “Mandatory” and “Voluntary”.[26]

All three types of policy instruments are important and
can stimulate the uptake of a desired outcome in different
ways. The more all three types of policy instruments are used
to complement each other, the greater the catalytic effect
towards change.
The way policy instruments are used sparks change by
enabling, engaging, encouraging and ultimately, enforcing.
Policies can enable the circular economy by removing
barriers, supporting the development of skills and capacity,
and providing information; they can engage through media
campaigns and voluntary industry agreements either within
the sector or across the supply chain. Policies can encourage
through tax cuts, subsidies, and reward schemes, and they
can enforce through penalties and fines (Fig. 4.5).
Past and present EU initiatives towards the circular
economy
In the period since the early 2000s the strategic resource
policy direction of the European Union has increasingly
pursued measures towards the sustainable use of natural
resources, increased resource efficiency in the economy, and
scaling up the recycling and prevention of waste. At the same
time, the Union has also sought economic growth (Fig. 4.6).
The EU promotes the circular economy with a package of
proposals (the first in 2015 and the latest in 2020), including a
comprehensive Circular Economy Action Plan and regulation
amendments.[27] The aim of this package is to improve the
competitiveness of EU businesses by shielding industries
against potential resource scarcities and price volatility, and
to help create new business opportunities and innovative
ways of production and consumption. The circular economy
is expected to create local jobs in the EU at all skill levels in
the workforce, as well as present opportunities for social
integration.
It is particularly stressed in the Action Plan that economic
actors, such as businesses and consumers, are to be the key
drivers in the transition process. However, local, regional and
national authorities are encouraged to act as catalysts in this
transition. The EU is to play a fundamental but supportive
role, ensuring that the right regulatory framework is in place
for the development of a circular economy in the market. The
EU Circular Economy Action Plan outlines potential policy
interventions that would enable this development (Fig. 4.7).
The number and complexity of interactions among
actors in a circular economy create a complicated policy
landscape. This inevitably extends across the different

Enable
Remove barriers
Give information
Provide facilities
Promote viable alternatives
Provide skills
Provide capacity

Enforce Engage
Targets Catalyse Supply chain agreements
Regulations Media campaigns
change
Penelties and fines

Encourage Exemplify
Tax system Targets
Expenditure grants Regulations
Reward schemes Penalties and fines

Figure 4.5. Policy approaches for catalysing change.[28]

 policies and networks | Circular Economy 56

2000

2002 – The Sixth Community Environment Action Program (6EAP), Decision No 1600/2002/EC
2005 – Thematic Strategy on the prevention and recycling of waste, COM(2005) 666 final.
– Thematic Strategy on the sustainable use of natural resources, COM(2005) 60 final.
6EAP
2008 – Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan,
COM(2008) 97 final
– The raw materials initiative: meeting our critical needs for growth and jobs in Europe,
– COM(2008) 699 final

2010 – Europe 2020 A strategy for smart, sustainable and inclusive growth, COM(2010) 2020 final
2011 – Flagship initiative for a resource-efficient Europe, COM(2011) 21 final
Europe 2020

– Roadmap to a Resource Efficient Europe, COM(2011) 571 final

– Eco-innovation Action Plan (ECO-API), COM(2011) 899 final

2013 – General Union Environmental Action Programme to 2020 living well, within the limits of our
planet (7EAP), Decision No 1386/2013/EU
7EAP

2014 – Towards a circular economy: A zero waste programme for Europe, COM(2014) 398 final
2015 – Closing the loop – An EU action plan for the Circular Economy, COM(2015) 614 final.

Figure 4.6. Timeline of EU resource efficiency initiatives 2002–2015.[29]

Waste markets
(secondary raw materials)

Economic instruments/incentives
Resource tax/labour tax, VAT
Reuse/
Cerification/standards second-hand Innovation
Waste shipment regulations market
Common EU market of Investment
secondary materials
Sharing economy Other
horizontal
Measures
Production Consumption
Waste
Management
Product Product
Products Services
design processes

Ecodesign BAT Waste prevention Improved waste EU funding mechanisms

Product policy BREFs Sharing/PSS legislation Horizon 2020
REACH and Sustainable New business models Increased recycling Stakeholder engagement
other chemicals sourcing GPP 6/Innovation PP7 targets
Related policies Remanufacturing

Figure 4.7. Policy proposals in the EU Circular Economy Action Plan COM (2015) 614 final.[30]

parts of production and consumption systems and affects,
directly or indirectly, several other parts in the value chain.
Such interacting networks might also extend in different
geographic locations within or between Member States.
In Table 4.2 (next page), current legislation relevant to
the circular economy at the EU level, both mandatory and
voluntary, is categorized by life cycle stage. There is a high
concentration of mandatory EU legislation towards the end-
of-life cycle phases. These aim to limit resource loss and
increase the circulation of materials, mainly through recycling.
In contrast, policies targeting consumption are rather limited
and and in general only indirectly affect resource efficiency –
a clear gap! While there are many directives and regulations
governing production processes at the EU level, the majority
do not explicitly target material resource efficiency, and as a
result a policy gap is observed at this life cycle stage as well.
This stated, the fact that some policies do exist at that level
is considered by many as positive. This, as material resource
efficiency considerations can still be added to an existing
policy, an easier pathway than seeking to create an entirely
new policy framework from scratch. As an example, there is
clearly scope for improving criteria for public procurement
and eco-labelling so that material resource efficiency
becomes more prominent.
At the Member State level, individual countries have the
freedom to devise their own resource efficiency agenda as
long as they do not counteract EU regulations. Recently, some
Member States decided to take resource efficiency policies a
step further, leapfrogging far beyond the existing EU policies.
Table 4.3 (next page) summarizes a number of ambitious policies
at Member State level that aim to increase resource efficiency.
When policymaking intervenes in systems, there is always
potential for both conflict or synergy. When applying a
single policy instrument there is always a risk of prompting
unintended outcomes that change other drivers, particularly
when the policy field spans several parts of the economy. For
57 Circular Economy | policies and networks

this reason, a more complex approach is needed in a circular
economy context, and policymakers are working with a mix
of policies and consider a wide range of related issues:
• the full range of available policy instruments targeting
resource efficiency;
• the full cost of policies, including implementation costs,
transaction costs and compliance costs;
• how to avoid negative interactions between single policies
(i.e. instruments already in place vs. new ones), but
emphasise mutual benefits with existing policies;
• how to carefully combine the instruments to mitigate side-
effects.
To place these issues in context, a hypothetical example
of a synergistic policy mix relevant to the circular economy
can be drawn. In this example, mandatory ecodesign rules for
reparability, together with material and parts certifications,
may be put in place to facilitate increased reuse of a product.
However, by themselves, these changes may not stimulate
changes in the market – there may be limited demand for
the product group, or there might not be collection systems
that ensure enough of the products are collected to support
repair and reuse, or it may be simpler for waste management
systems to scrap the products for material recycling. Here
additional policy interventions may be added to support
progress. An example of a supporting policy intervention

Table 4.2: Existing policies in the EU related to products, materials and resources.[29]

Life cycle stage Production Use / consumption Waste management

Mandatory Batteries and waste batteries
Directive 2013/56/EU
WEEE Directive 2012/19/EU
RoHS Directive 2011/65/EU
Ecodesign Directive 2009/125/EC*
Packaging and waste packaging
Directive 94/62/EC
Standardisation Regulation (EU)
No 1025/2012
Marketing of construction products
Regulation (EU) No 305/2011
REACH Regulation (EC) No
1907/2006*
Labelling of energy-related
products Directive 2010/30/EU
Ecodesign Directive 2009/125/
EC*
Sale of consumer goods and
associated guarantees Directive
1999/44/EC
Waste Framework Directive 2008/98/EC
Batteries and waste batteries Directive 2013/56/EU
Plastic bags Directive (EU) 2015/720
WEEE Directive 2012/19/EU
RoHS Directive 2011/65/EU
Waste from extractive industries Directive
2006/21/EC
ELV Directive 2000/53/EC
Landfill Directive 1999/31/EC
Packaging and waste packaging Directive
94/62/EC
Shipments of waste Regulation (EU) No 660/2014
REACH Regulation (EC) No 1907/2006*

Voluntary Public procurement Directive Public procurement Directive

2014/24/EU 2014/24/EU
Ecolabel Regulation (EC) No Ecolabel Regulation (EC) No
66/2010 66/2010

* The Ecodesign Directive and REACH regulation serve as a policy framework out of which specific implementing measures are formulated and applied
by case (product group or chemical compound respectively). To date, the application of ecodesign focused primarily on energy efficiency measures and
material resource efficiency appears very limited.

Table 4.3: New policy approaches in EU Member States promoting the circular economy.[29]

Member State Policy measure Application

France Act on consumption and preventing planned product obsolescence. Mandatory

The Act (Law no. 2014-344) addresses product durability and aims to prevent planned National
obsolescence. The law includes articles related to the lifespan of consumer goods, including
the introduction of extended product guarantee from six months to two years; and the
obligation of retailers to inform customers about the time horizon that spare parts will
remain available for a product in question (EEA 2016).

Spain Reuse targets for Waste Electrical and Electronic Equipment (WEEE). Mandatory

In its new Waste Management Plan 2016-22, Spain sets a target of 50% municipal waste National
to be prepared for reuse or recycled, followed by a specific target of 2% for preparation for
reuse in certain waste streams including textiles, WEEE, furniture and “other suitable waste
streams” (Ruiz Saiz-Aja 2016).

Sweden Value Added Tax (VAT) reduction in repair services. Mandatory

The Swedish government suggested a VAT reduction in repair services for a selected group National
of products (bicycles and shoes). In addition, the government proposed a tax deduction for
repair services performed in relation to home renovations (IVA 2016).

Sweden Public procurement of refurbished ICT equipment by Swedish municipalities. Voluntary

Two Swedish municipalities (Gällivare and Laholm) apply specific criteria in public Local
procurement, tendering the provision of refurbished ICT equipment for use in municipal
services (Avfall Sverige 2015).

is introducing public purchasing criteria that favour, or even
require, the purchase of reparable and reusable products
– thus creating a base market. A second may be the
implementation of novel extended producer responsibility
rules that support the refurbishment of products over and
above recycling. This intervention helps ensure that such
products could retain additional value from the item and
maintain the resources embedded in the product, either
intact or with minor modifications.
The Circular Economy Package
In past decades, policymaking in the European Union most
often took an end-of-pipe approach, aiming to fix a problem
rather than to prevent its cause. Thus, when examining the
product lifecycle, most mandatory policies we find today
target the end-of-life and waste phase. At other lifecycle
stages the majority of policies are of a voluntary nature.
Although significant improvements have occurred in recent
years, the old approach is clearly reflected in existing resource
efficiency policies.
After a series of discussions around progressive resource
efficiency strategies the European Commission adopted the
ambitious Circular Economy Package in 2015. This package
includes legislative proposals on waste, and a detailed action
plan. In addition to introducing more stringent targets for
reuse and recycling and streamlining waste rules, the Action
Plan includes a complete set of policy proposals targeting all
stages of the product life-cycle (Fig. 4.8).
Particular focus is given to instruments that could
influence resource efficiency from the beginning of the
life cycle, such as ecodesign and extended producer
responsibility policies. These aim to change the way
products are designed. Other areas of intervention include
standardization and certification for increased durability,
reparability and recyclability of products. Public procurement
Product life cycle
Production/Product design Use phase/Consumption
Figure 4.8. Indicative weighting of EU policy pre-2010.[29]
policies and networks | Circular Economy 58
is another policy approach that can significantly pull the
uptake of circular solutions.
A broader perspective for future circular economy policy
The systemic nature of the transition towards a circular
economy implies that while policy measures targeting the
waste phase are necessary, they are insufficient to achieve
circular products. In this context, two elements are essential:
first, the focus of the policy should encompass more than just
waste management; and second, policy actions throughout
the product’s life-cycle need to be aligned to avoid negative
side-effects and lock-in situations, and to capitalize on
potential synergies.
Initially, waste-related policies were introduced to tackle
environmental and health problems related to landfill. Over
time, the policy focus shifted towards stimulating recycling
as an environmentally and economically sound way of
managing waste. Product policies initially focused on the
energy efficiency of products and the labelling of products
with lower environmental impacts. With the policy focus
now being on the transition towards a circular economy
in which the value of products is maintained for as long as
possible, a new phase in policy-making has been initiated.
However, the change that is needed now is a widening,
rather than a shift, of the policy focus. Stimulating
markets for recycling is an important part of the transition,
but the inner circles of circularity (i.e. reuse, repair and
remanufacture) also need significant stimulation. At the
EU level, durability, reparability, upgradeability, design for
disassembly and ease of reuse and recycling will play a
bigger role when setting ecodesign requirements according
to the Ecodesign Directive.
In general, a wide range of possible policy instruments
to improve product circularity can be applied throughout a
product´s life-cycle (Fig. 4.8). However, it will be essential to
End of Life/Waste
59 Circular Economy | policies and networks
Reuse, Repair, Redistribute, Refurbish, Remanufacture
ECODESIGN
• Specific regulations for product design to increase
the product’s circularity (e.g. related to preparation
for reuse in terms of spare parts, product liability or
design requirements, such as in the WEEE Directive
• Regulations on disassembly of products
• Product standards can increase aspects such as the
modularity of product design
• Front-runner approaches based on product environ-
mental footprint declarations
EPAIR, RE
MATERIALS
• Market restrictions for non-recyclable
FU
materials or products that are not yet
sufficiently recycled
• Phasing out of environmentally harmful
subsidies for fossil-based fuels
• Fuel taxes to reduce transport distances
• Regional sourcing of raw materials
• Application of green public procure-
ment guidelines
EXTRACTION OF RESOURCES
• Material extraction taxes
• Permitting processes that reduce unused extraction
• Targets based on indicators that include extraction
Figure 4.9. Overview of potential policy instruments affecting product circularity throughout the product life-cycle.[31]
ensure the alignment of policy measures throughout the life
cycle, not only to avoid conflicting incentives for businesses
and consumers, but also to capitalize on synergies resulting
from concerted action aimed at different product circularity
strategies. For example, the collection rate of end-of-life
products from consumers could be increased if collection
initiatives not only make use of recycling as an argument for
consumers to hand in their old products, but also include the
opportunity to reuse or repair. Another issue to be tackled
is the aspect of liability when the repair of a product is
undertaken through an informal sharing economy approach
(such as repair cafés).
Streamlining policy measures is, however, a significant
challenge. This is not only because different policy actors are
responsible for different stages in a product´s life‑cycle, but
also because it is difficult to predict all the possible impacts
of a policy before it is implemented.
To place these issues in context, a hypothetical example
of negative side-effects related to conflicting incentives
can be presented. In this example, a policy measure is to
provide economic incentives to improve the recycling of
a composite waste material (e.g. electronics). These have
many different parts and materials. Logically, recyclers
will respond with investment in, and development of,
sorting and recycling technologies and infrastructure that
will enable increased recycling. However, as it becomes
easier to recycle, product designers and manufacturers
may have less motivation to innovatively design products
PRODUCTION AND DISTRIBUTION
• Financial support for cleaner production initiatives
• Regulatory requirements with regard to internal closure of
material loops or waste prevention requirements
• Extension of warranties, leading to more durable products
• Securing the availability of spare parts, to support the
repair and remanufacture of second-hand products
CONSUMPTION AND STOCK
• Changing consumption patterns via actions such
as clarification of liability regulation for shared
UTE, REFURB consumption
UB IS
TR • Tax incentives for product-service systems
H,
S
DI
• Regulations on the provision of necessary
RE
infrastructure
MANUMACT
• Product labels and consumer awareness
campaigns
,R
SE
U
RE
RE
WASTE
• Financial incentives in the form of deposit schemes
and reduced VAT
R E C Y C LI N G • Extended producer responsibility
• Technical regulations to improve the collection of
discarded products
• Specific reuse targets and guaranteed access to
discarded products for actors in the reuse sector
that are easier to recycle (a process that could be costlier),
thinking that the advanced sorting technologies will take
care of them anyway. Such situations can also happen in
reverse. For example, a situation can also arise that when
incentives are given for better product design, then there
will be less incentive, motivation and need for recyclers to
improve their sorting and recycling processes. This would
then result in lower quality recycled materials despite the
better product design.
Such examples highlight the need to use a monitoring
framework allowing the identification of systemic impacts of
policy action, and appropriate adaptations (Fig. 4.9).
4.3 EXTENDED PRODUCER RESPONSIBILITY
• Extended producer responsibility (EPR) is a policy
principle that promotes efficient waste management
and supports improved resource management by pro-
viding producers incentives to consider the end of life
of their products when designing them.
• Products that contain metals are frequently part of
EPR systems.
• A challenge for EPR implementation is that some end-
of-life products are disguised as products for reuse in
order to avoid more stringent and expensive recycling
requirements in countries with more highly developed
infrastructure.

The origins of Extended Producer Responsibility (EPR)
In Europe, the Extended Producer Responsibility (EPR) principle
is often considered a key approach for the circular economy.
The origins of EPR can be traced back to the late 1980s
when many industrialized countries were struggling with
their waste management, landfills were filling up and it was
difficult to open new ones. Waste incineration was becoming
more common, but it also met a lot of opposition. Household
recycling had started, but the results of most initiatives were
not very impressive. One reason for the limited success
was that municipalities often lacked the money needed to
build convenient and effective infrastructure for recycling.
Municipalities are also normally reluctant to increase fees and
taxes – and when they do so, there are competing issues for
how to use the money. Actors in society also began to pay
attention to the fact that products were typically designed
and manufactured without any plan for how they should be
treated as waste.
All this led to the development of a new strategy for
how to approach the waste management and recycling
of products. In 1990 the principle of Extended Producer
Responsibility was formulated and gradually introduced in
various countries.
The essence of the EPR principle is that producers are
incentivized to consider the end of life of their products when
designing them. This is achieved by making the producers
responsible for the end-of-life management of their products.
In addition to financial responsibility, producers are also
often assigned responsibility for organising the collection
of the discarded products. This makes it possible for them
to control the costs for end-of-life product management. In
practice, producers typically form collectives called Producer
Responsibility Organizations and these organizations collect fees
from producers and then hire waste management companies
to collect and recycle the products. Producers, of course, seek
to recover these costs when selling the products so in the end,
policies and networks | Circular Economy 60
it is the users of the product that pay. This means that the cost
of taking care of the product at its end-of-life will be reflected
in the price and will also influence the purchasing decisions.
Over the past 25 years or so, EPR has been introduced
for a variety of products. The most notable product groups
are packaging, cars, batteries, and electrical and electronic
equipment. Most of these products are related to metal
recycling.
WEEE as a central example
Waste Electrical and Electronic Equipment (WEEE), also called
e-waste, is among the most common products addressed by
extended producer responsibility. Since the first EPR systems
for electronics started to appear in Asia and Europe in the late
1990s, EPR has spread to many countries on all continents.
The scope of these systems differs among countries, but
there are a number of common patterns. In most East Asian
countries, the EPR systems started with a focus on a smaller
set of bulky products that contribute more to waste volumes,
such as refrigerators, air conditioners, washing machines and
TVs, and their scope gradually expanded from there. In North
America they also started on a smaller scale and then gradually
expanded, but their EPR systems often started with products
that contain lead and mercury, such as TVs and computers.
In Europe, EPR systems covered a wide range of electrically
powered products of various sizes, used both at home and
in offices, and also some professional equipment like medical
equipment and vending machines right from the start.
Many WEEE laws are introduced with requirements that
restrict the use of toxic substances like mercury, cadmium,
lead and hexavalent chromium. These laws also stipulate
what costs should be covered by the producers, who should
be responsible for collection, recycling and environmentally
sound treatment. The laws also typically mandate how much
(i.e. what proportion of the total amount of WEEE generated)
electronic waste should be collected, reused or recycled, and
61 Circular Economy | policies and networks
often include requirements on how various products should
be handled or treated – for instance, if certain components
have to be removed before further processing. The actual
active engagement of producers varies across systems, but in
general the engagement is rather limited in Europe. In other
countries however, such as Japan, prominent producers run
at least one recycling plant themselves.
WEEE legislation has led to a development of collection
systems for discarded electronics in most OECD countries,
but the existing systems are not always very convenient
for the citizens. In many instances, this has resulted in low
collection rates, especially for small appliances. In Europe,
revised legislation now calls for easy-to-access collection
systems for very small electronics, like mobile phones and
light bulbs. The legislation mandates that large retailers have
to accept very small electronics without consumers buying a
new product. This is one way of reducing the likelihood that
these products are thrown into the mixed residual waste and
thus end up in landfills and waste incinerators.
Another challenge for the collection systems has been
that many discarded products actually still work and there
is a potential second-hand market. While continued use
is preferable in most cases (as it extends the lifetime of a
product), there is also a very real risk that these products
end up in countries that don’t have functioning recycling
systems and that ultimately, they are discarded without any
environmental controls.
Some discarded products containing valuable metals
are also exported for recycling in other countries. They are
often disguised as products for reuse in order to avoid more
stringent and expensive recycling requirements at home.
These products then often end up in recycling markets
where the primitive recovery methods used only capture a
limited portion of the useful metals and create devastating
environmental and health hazards. This has seriously
affected impoverished people around the world, mostly in
Africa and Asia.
In most OECD countries there are state-of-the-art
recycling facilities that are able to recover almost all metals,
including minute amounts of so-called critical elements such
as rare earth metals. Such facilities also emit extremely few,
if any, hazardous elements to the environment.
The fate of phones. Mobile phones are clearly part of the
challenge when it comes to collecting discarded prod-
ucts. This is a market that has grown extremely quickly,
and many mobile phones are still very much fit for use
after the first owner has upgraded to a newer model.
The shift of owners may be repeated several times as
the phone gets older. With repair and dedicated design
adjustments it is technically feasible that the lifetime of
a mobile phone could be extended even more. But due to
so-called “style obsolescence”, the cessation of software
updates, and so forth, such older phones most often end
up in markets that do not have good recycling systems or
technologies. Another limiting factor is the cost of repair
and varying quality of repair works, due partly to the
limited availability of authorized repair parts.
Moving forward with EPR
The present EPR systems still face many challenges, but
the development of collection and recycling systems has
advanced a lot during the last decades. Many countries now
collect and recycle the majority of discarded electronics, and
we are witnessing a rapid development in the technology
systems that treat or process the materials within them.
But, more progress is required. In particular, collection
systems need to improve, especially for smaller electronic
equipment, so even more products can be recycled. We
also need better treatment systems and technologies for the
collected items that allow for an effective use of the contained
substances through well-working recycling systems.
The most difficult challenges for making EPR a central tool
for obtaining a circular economy is in reformulating the laws
to assure there are clear incentives for producers to redesign
their products to have less environmental impact, and to

ensure that the legislation is implemented with effective and
honest monitoring. The reuse of products and the design for
optimal life times also needs to improve – and this demands
sound systems and good control.
Last but not least, although based on the same concept,
the design and implementation of EPR programmes varies
significantly. There are big differences between different
products, and also between different countries. When
discussing EPR programmes, it is very important to pay
attention to the specifics of each program.
4.4 ECODESIGN POLICIES
• The Ecodesign Directive promotes product attributes
such as longer product lifetimes and improved prod-
uct reparability that align well with circular economy
approaches.
• There are several options to regulate resource efficien-
cy of products included within the Directive.
• Complexities related to product-related regulations
dictate that, despite all planning, it is likely that soci-
ety may still have to experiment with the policies to
see what works best.
Policies for extending product lifetimes
One way to reduce material use is to encourage people to use
products longer. The product lifetime is dependent both on
the product design and the potential for repair of a damaged
or otherwise non-functional product. Reparability is in turn
dependent upon the availability of spare parts and access
to reasonably priced repair services. Today, unfortunately, it
often makes more economic sense to the consumer to buy a
new product than to repair the old one.
So in order to promote longer product lifetimes,
European governments have adopted different policies
to provide incentives for manufacturers to increase the
product lifetime. For instance, some EU countries have
reduced the Value Added Tax for repair services in
order to stimulate the repair sector and make repair a
more attractive option for consumers. Several European
countries have also recently changed the legal warranty
time for many products. In some countries consumers can
now claim a right to repair or replace a product for up to
six years after the purchase.
France has adopted perhaps the most progressive policies;
they have now criminalized planned obsolescence, sending
a clear signal to the market. Further, France has also started
to examine the practices of some corporations seeking
evidence that planned obsolescence is actually taking place.
In addition, France has introduced a scheme to provide
incentives for manufacturers to ensure that spare parts
are available to consumers for a number of years after the
purchase of the product.
Policies for Ecodesign
There are many different initiatives in European countries
seeking to provide incentives for the design of more durable
policies and networks | Circular Economy 62
products and to reuse, repair or remanufacture products.
However, none of the national policies actually regulate
product design. As the EU supports free trade of goods, it
would be problematic if different European countries had
their own rules for product design and composition. It would
mean that products manufactured in one country could
not be sold in another country. Therefore, rules related to
product design are usually adopted by the European Union
and are then applied equally in all member states.
The EU’s main law related to product design is the
Ecodesign Directive. The Ecodesign Directive is a framework
law, and under this law, the European Union sets specific
legislation for different product groups. These include
products that are related to significant energy use, such as
dishwashers, washing machines, refrigerators/freezers, water-
boilers, TVs and electric motors. In most product groups the
main focus in the legislation has been the energy efficiency
of the products. However, now there are also ongoing
discussions on how resource efficiency can also be considered
within legal frameworks. For instance, the European Union’s
Circular Economy Action Plan promotes “the reparability,
upgradability, durability, and recyclability of products” and
new legislation is now being considered for such.
One approach among the strategies under consideration
is to regulate lifetime or durability. Indeed, this has already
been put in place for vacuum cleaners, where the motor
lifetime and durability of the hose has been regulated. There
have also been lifetime requirements set for lighting products
such as lightbulbs.
While setting standards on lifetime may at first appear
straightforward, in practice it can be very complex. For
example, “lifetime” actually has several dimensions. Lighting
products are a useful example to explain this term, as it
includes not only the estimated useful length of life in hours
but also how many switching cycles the lamp can endure
and how the light output deteriorates over time. It is also
necessary to test the legal requirements to ensure that
manufacturers can comply with the laws. It is a challenge to
ensure a product lasts for 15 years without actually testing
it for 15 years!
A second type of requirement that can also be posed
is that manufacturers must promote product reparability
and guarantee the provision of spare parts for several years.
In addition to improving reparability, guaranteeing the
availability of spare parts will also make repair a feasible,
and potentially more attractive option to the consumer.
A third type of requirement is to promote modular design.
Modular design is considered to be good for the environment
if it increases the lifetime of consumer electronics. The most
obvious case is that it becomes easier to change the battery,
as it is often battery problems that makes a product less
functional. But modular design is not easy to regulate, and
there is always some risk that such rules can hinder desired
design functions, and stand in the way of innovative design
solutions. Nevertheless, some rules could be very feasible,
such as rules that make it easier and cheaper for the consumer
to change the battery!
63 Circular Economy | policies and networks
A fourth type of requirement is related to design for
recycling. One proposed example is that manufacturers
must show that a product can be taken apart within a set
time period, which makes recycling more cost-effective.
Related to recycling, another category of rules could relate to
declaration of content. If a manufacturer accounts for what
materials are in a product and where they are situated, future
recycling operations could be improved.
There are other options, too. In the light of this complexity,
it is necessary to recognize that it is complicated to adopt such
rules; and it is generally accepted that rules should not hinder
desired innovations. A great challenge concerns the need to
develop standards and test methods that help authorities
ensure that manufacturers comply with the laws. Often, it is
quite difficult to set requirements unless there are standards
available to test them. If there are no such standards then they
must be developed, and this is a time-consuming process.
Finally, one concern is that even if we make products durable,
consumers may still change products before they have
reached their useful lifetime. A prime reason for this is for
reasons related to function or fashion, the latter which can
be considered almost invariably to be a waste of resources.
We must remember that reality is never straightforward. If
we force manufacturers to develop more durable products,
they may be incentivized to make them upgradeable and
lease them to consumers instead of selling them, which could
benefit its environmental performance. So, in some respects
society may have to experiment with the policies to see what
works and what doesn’t.
Remember, too, that the Ecodesign Directive is not the only
possible instrument to promote product resource efficiency.
Another option is to stimulate longer product lifetimes and
reparability through consumer labelling initiatives.
4.5 POLICY OUTLOOK
• The EU brings together private, public and academic
stakeholders to provide guidance on addressing the
challenges related to raw materials using the circular
economy.
• The Netherlands in particular has initiated a progres-
sive plan for its circular economy transition, with goal
to have a fully circular economy by 2050.
• Implementing such policies at the EU would accelerate
the circular economy transition across the world.
The EU European Innovation Partnership on Raw
Materials and the role of Netherlands – an EU
country perspective on circular policy
The European Union has its own circular economy policy
framework, but it also encourages policy development at the
member state level. The European Innovation Partnerships,
EIPs, are a new approach to EU research and innovation. The
EIPs cover a number of topics; the EIP Raw Materials topic has
a direct relationship to the circular economy.
The European Innovation Partnership on Raw Materials
(see text on page 66 and weblinks on page 74) is a stakeholder
platform that brings together representatives from industry,
government, academia and NGOs. Its mission is to provide
high-level guidance to the European Commission and
Members States on innovative approaches like the circular
economy to address the challenges related to raw materials.
The EIP plays a central role in the EU’s raw materials
policy framework and a key output is a document called
 policies and networks | Circular Economy 64

the Strategic Implementation Plan. It sets out specific
objectives that target and support research, disseminate
best practice and encourage cooperation between
countries. A direct example is the production of this
Compendium document.
As the European Union is made up of member states,
the EIP needs to ensure alignment with their national
policies. One member state, the Netherlands, has stated
a progressive plan for a transition to a circular economy,
All of the above steps, if applied across all member states
in the European Union, could accelerate the transition to a
circular economy across the world.
4.6 NETWORKS AND INFORMATION SHARING
• Stimulating circular economy systems requires imag-
ining new systems that reduce resource consumption
and the amount of emissions in the environment.

setting ambitious objectives for 2030 and 2050. By 2030 • Innovation happens when people and companies meet
the goal is a 50% reduction in the use of primary raw to brainstorm, network and exchange knowledge.
materials, including minerals, fossil fuels and metals. By • Governments and society are developing networks
2050 the goal is to have a “fully circular economy” in the to connect people and cultivate synergies to support
circular economy implementation.
Netherlands.
The Netherlands has formulated strategic goals to achieve
this policy. This includes ensuring that raw materials in
existing chains are utilized at high quality. There is also a
goal for fossil fuels and critical raw materials, which, where
possible, are to be replaced by renewable and more widely
available raw materials. There is also a goal to develop new
production methods and promote new ways of designing
and consuming products. This is all to be achieved within the
frame of a circular economy.
However, there is explicit acknowledgement that current
policies are insufficient to achieve the transition to a circular
economy. This is largely because the focus is still aimed more
at countering the damaging effects of waste and emissions,
and not enough at utilising the value of raw materials. In
order to address this, the government of the Netherlands
propose instruments across five priorities:

• stimulating laws and regulations, such as developing circu-

lar product design guidelines;
• developing smart market incentives, such as circular public
sector procurement;
• financing, such as support for circular entrepreneurs and
startups;
• knowledge and innovation, such as monitoring material
flows, across national and international value chains;
• international cooperation, such as forming strategic inter-
national coalitions.
The proposed guidelines for circular product design would
include preventing the use of materials and components
that are difficult to recycle in standard recycling processes,
selecting materials that can be more easily reused, making
the reuse of subcomponents possible, minimizing the
different connections in a product and reducing the variety
of materials used.
As part of circular product design thinking, guidelines for
Design for Disassembly are also proposed. They include:
• ensure less manual force required to take the product apart;
• simplify connection mechanisms;
• increase use of identical parts so that recognition at
disassembly is easier;
• make it easier to recognizable connection points;
• eliminate hazardous materials.
Sharing information is important when attempting to foster
a circular economy. The wave of circular economy policies
initiated by governments has resulted in a need for these
governments to develop tools to support their implementation.
Governments and society are developing networks as a
tool to connect people and cultivate the necessary synergies,
as the circular economy requires reorganizing the circulation
of resource flows. This new circulation implies that different
stakeholders collaborate to exchange energy or material
flows based on their needs. For example, a company in the
UK might have ceramics that they want to get rid of. At the
same time, a company in France might need ceramics as a
raw material for building, which would decrease the amount
of virgin raw materials used. So, the organizations discarding
and those demanding material and energy to be reused or
recycled need to somehow get in touch.
Stimulating circular economy systems also implies thinking
outside of the box and imagining new systems that reduce
resource consumption and overall emissions in the environment.
Innovation takes place when people and companies meet to
brainstorm, network and exchange knowledge. This helps
them identify what is needed, what is feasible (or not), and if
an idea can actually contribute to creating a circular economy.
Several initiatives around this topic have been launched by
65 Circular Economy | policies and networks
public authorities and independent organizations to promote
the circular economy agenda.
One example of an initiative launched by public
authorities is the European Circular Economy Stakeholder
Platform (https://circulareconomy.europa.eu/platform/ )
launched by the European Commission in 2017. This
platform aims to gather existing networks focusing on the
circular economy in a “network of networks” to stimulate
collaboration and knowledge sharing on opportunities
and challenges. The platform gathers experts in the field
of circular economy, organizes stakeholder discussions via
conferences, and shares knowledge, strategies and best
practices via a website. The European Commission is also
funding a consortium of actors in the sector of raw materials
in Europe called EIT Raw Materials, initiated by the European
Institute of Innovation and Technology. EIT Raw Materials
gathers more than 100 partners in academia, research
institutes and businesses to find innovative solutions to
secure and improve the supply of raw materials in Europe,
including to a large extent the development of circular
systems. This Compendium has been produced within such
an EIT Raw Materials Initiative.
Yet another example is the initiative launched by the
association ACR+, which was founded by a group of
local authorities under the lead of the Brussels-Capital
region. ACR+ launched the Circular Europe Network
(https:// w w w.circular- europe-network.eu) to share
knowledge on efficient circular economy strategies
implemented by cities and regions. One interesting output
of the network is a map, which gathers successful circular
economy initiatives from different regions in Europe (FIg. 4.10).
Besides initiatives launched by public authorities, other
actors such as academia and businesses also participate in
Glasgow
Hamburg
Bordeaux
Valencia
Figure 4.10. Circular Economy initiatives throughout Europe.[32]
creating networks. This is the case of the Ellen MacArthur
Foundation and its programme Circular Economy 100
(https://www.ellenmacarthurfoundation.org/our-work /
activities/ce100). It aims to enable organizations around
the world to innovate in the field of circular economy by
bringing together companies, governments, cities, academia
and emerging innovators. Members of the network have
access to tools such as a matchmaking app, acceleration
workshops and an Executive Education course. This initiative
was recently extended with the creation of two specific
programs for Brazil and the US.
Other types of initiatives gather specific technical
information for social and environmental assessments of
supply chains and resource management. The European
Platform on Life Cycle Assessment was launched in 2014
by the European Commission to gather information and
data for businesses and policy makers to make life cycle
assessment studies. It hosts a registry called the Life Cycle
Data Network (https://ec.europa.eu/jrc/en/network-bureau/
life-cycle-data-network) for stakeholders to deposit life
cycle inventory data and processes. It also frames the
development of the European Life Cycle Database, which
gathers life cycle inventory data for key products from EU
business associations and others. For example, if seeking
information on aluminium extrusion, a complete description
of one specific process can be found on this website,
including materials and energy consumption necessary for
the process.
These examples stress the importance of information
sharing in the development of a circular economy as
intended by regional policies. Initiatives are already
ongoing, from the creation of networks for matchmaking
to the creation of new communication tools and technical
Lund
Copenhagen
Prague
Kraków
San Marino

databases that can support innovators in their efforts to
create new circular systems. These networks rely on the
participation of all actors involved to transition towards a
circular economy.
Other examples of initiatives to stimulate circular
economy via information sharing and networking
Many other initiatives aiming to stimulate circular economy
via information sharing and networking are emerging
around the world. They are led by a wide range of
stakeholders, are implemented at different scales (from
regional to worldwide levels) and have different levels of
maturity. They can be a source of information and help
project developers reach circular economy experts or future
collaborators. A number of examples are introduced in the
following paragraphs. Links to their websites are included
at the end of this chapter.
The Circular Economy program of the WBCSD (global)
The World Business Council for Sustainable Development
(WBCSD) has launched a circular economy program. Several
outcomes of this program aim to inform businesses on
circular economy practices and bring them together to
create synergies. One example is the Circular Economy
Practitioner Guide launched in 2017. It presents several
circular economy practices as well as case studies, tools
and publications from other organizations such as the Ellen
MacArthur Foundation. Another output of the program
is the MarketplaceHUB, an online platform that maps
initiatives that promote the use of secondary resources
around the world. The platform mainly maps marketplaces
allowing businesses to publish their offers and demands for
secondary materials (e.g., the North Carolina Waste Trader
in the USA or the Belgian Waste Stock Exchange).
policies and networks | Circular Economy 66
The Circular Economy Club (world)
The Circular Economy Club (CEC) is an international non-
profit network of over 2600 professionals around the
world. It aims to connect members to create synergies, for
example via the voluntary activities of CEC local organizers
who can organize networking events in their city, and to
provide professionals with open tools and resources via their
website. Resources and tools promoted include: information
on funding opportunities; new publications on circular
economy; guidelines to apply the circular economy principles,
and examples of circular systems applied in different sectors.
The Raw Material Information System of the
European Commission (EU)
In the EU, the Raw Material Information System (RMIS) was
developed by the European Commission Joint Research
Commission (JRC) as a web-based knowledge platform on
non-fuel, non-agricultural raw materials from primary and
secondary sources. The website aims to gather information on
raw materials, including critical raw materials and secondary
materials (e.g. definitions, policy and legislation, environmental
and social sustainability, etc.). In terms of the circular economy,
the RMIS will provide information for specific industrial sectors
such as Electric and Electronic Equipment (for which product
factsheets on product lifetime, recycling and ecodesign
opportunities will be available) and Mobility.
The European Innovation Partnership on Raw
Materials (EU)
As mentioned earlier (p. 63) the European Innovation
Partnership on Raw Materials (EU) brings together
representatives from industry, public services, academia and
NGOs. Its mission is to provide high-level guidance to the
European Commission, Member States and private actors
67 Circular Economy | policies and networks

on innovative approaches to raw materials challenges.
The EIP plays a central role in the EU’s raw materials policy
framework. The EIP on Raw Materials has the aim to help
raise industry’s contribution to the EU GDP to around 20%
by 2020. It will also play an important role in meeting the
objectives of the European Commission flagship initiatives
Innovation Union and Resource Efficient Europe. It will do
this by ensuring the sustainable supply of raw materials to
the European economy whilst increasing benefits for society
as a whole.
The EIP targets non-energy, non-agricultural raw
materials. Many of these are vital inputs for innovative
technologies and offer environmentally-friendly, clean-
technology applications. They are also essential for the
manufacture of the new and innovative products required
by our modern society, such as batteries for electric cars,
photovoltaic systems and devices for wind turbines. With
about 30 million EU jobs depending on the availability of
raw materials, the EIP will have a clear, positive impact on
European industrial competitiveness. The EIP’s Strategic
Implementation Plan (SIP) sets out specific objectives and
targets. Actions to achieve these include research and
development, addressing policy framework conditions,
disseminating best practices, gathering knowledge and
fostering international cooperation.
The circular economy platform of the Americas
(American continent)
The Circular Economy Platform of the Americas (CEP-
Americas) is an initiative of the Americas Sustainable
Development Foundation (ASDF). It aims to facilitate the
transition to a circular economy in the Americas, especially
in South American countries. It functions through the
involvement of professionals in the sector, networking
events to connect people and ideas, as well as the sharing
of information on the latest advancements of the American
continent toward a circular economy.
The economiecirculaire.org platform (France,
Switzerland and Belgium)
The economiecirculaire.org platform is a French initiative that
aims to explain the concepts of circular economy, connect
local circular economy platforms, and facilitate experience
sharing in France, Belgium and Switzerland.

Links to various initiatives

The Circular Economy program of the WBCSD. More information on: https://www.wbcsd.org/Programs/Circular-Economy
The Circular Economy Club More information on: https://www.circulareconomyclub.com
The Raw Material Information System of the European Commission More information on: http://rmis.jrc.ec.europa.eu
The European Innovation Partnership on Raw Materials More information on:
https://ec.europa.eu/growth/sectors/raw-materials/eip_en
The circular economy platform of the Americas More information on: https://www.cep-americas.com
The economiecirculaire.org platform More information on: https://www.economiecirculaire.org

AUTHORS and PRESENTERS CHAPTER 4: POLICIES AND NETWORKS

4.1 THE HISTORICAL PERSPECTIVE David Peck – Delft University of Technology, The Netherlands and Karl Vrancken – Sustainable Materials Management,
VITO, Belgium.
4.2 POLICIES FOR A CIRCULAR ECONOMY Leonidas Milios – IIIEE, Lund University, Sweden.
4.3 EXTENDED PRODUCER RESPONSIBILITY Thomas Lindhqvist and Naoko Tojo – IIIEE, Lund University, Sweden.
4.4 ECODESIGN POLICIES Carl Dalhammar – IIIEE, Lund University, Sweden.
4.5 POLICY OUTLOOK David Peck – Delft University of Technology, The Netherlands
4.6 NETWORKS AND INFORMATION SHARING Sophie Sfez, Green Chemistry and Technology, Ghent University, Belgium.
 5
Circular Societies
69 Circular Economy | circular societies
This chapter examines new norms, forms of engagement, social systems, and institutions
that are needed by the circular economy, and discusses how we can help society become
more circular.
5.1 CIRCULARITY’S VALUE TO SOCIETY
• The circular economy can create value for society by
securing global resources, preserving natural systems,
and stimulating new norms and institutions that sup-
port our society.
• Large proportions of many economies rely on natural
material or processes and services, this is a strong rea-
son to transition to a circular economy and protect
such resources.
• The circular economy transition will shift the way our
modern society and institutions function, and the
value of materials, services and skills and technologies.
Securing resources for social equity and development
The circular economy can create value for society in three
major ways. The first is that it can help secure global resource
availability. A second is how it can help preserve the ability
of natural systems to deliver goods and services to society.
A third way is related to the idea that we cannot achieve
a circular economy without developing new technologies,
norms and institutions, which can support and stimulate our
society.
To start this discussion, we need to go back to a central
argument supporting the need for circular economy: we
must reduce burdens on the Earth’s ecosystems. This is a
very significant task. We face a future where by 2050 there
may be 10 billion people that can afford a wealthy lifestyle
with high levels of goods and services. A business as usual
approach in this future – where we continue to use too many
resources, too quickly, and don’t reuse them – will exceed
global resource availability. If we want to maintain the earth’s
ability to support humankind, we must provide these goods
and services using only a fraction of the material and energy
consumption per person of today’s developed countries. This
is a radical shift!
All societies must build their infrastructure in order to
develop. There are many countries that are still developing –
in all parts of the world – with Africa and South Asia as two
regions that most people immediately recognize. Countries
in such regions have yet to build all the factories, schools,
hospitals, roads, railways, energy grids, and houses that are
required to provide for a long healthy life.
Simply put, global society needs the circular economy
to ensure that the resources required to support human
development are available.
Preserving natural production systems
It must also be clearly understood that non-renewable
resources like copper and iron are not the only resources that
we deplete. The inefficiencies and wastes that are inherent
with the current linear economy also endanger the supply
of important resources from nature. Very large proportions
of most of the world’s economies actually rely on material
things that we take from nature, or on the processes that
natural systems provide when they can function normally.
Damage from pollution can drastically reduce the ability
of natural systems to produce renewable resources, and
taking too much, too fast, from natural systems can also
damage them.
Reducing the dangers posed, and the damage caused, by
waste and over-extraction is vital to preserving the ability of
natural systems to support and supply society. One part of
this is the danger pollution poses to health. Air pollution, for
example, results in the loss of millions of human lives every
year. Apart from the human tragedy within this, impacts on
health along with lost productivity and the health care costs
also impact our economies negatively.
Pollution also threatens environmental systems that
produce renewable resources. Clean air and water, timber
from forests, and fish from the sea are examples of these.
We call these ecological goods. Sadly, pollution from today’s

linear, take-make-waste economy threatens many ecological
goods. For example, crop yields are reduced – oftentimes
quite drastically – when air and soil are contaminated.
Forests that produce valuable timber are damaged by acid
rain. Fisheries are damaged, or even destroyed, by the
effects of pollution and overfishing. And all such systems are
threatened by pests and diseases that flourish in a warming
climate that has more extreme weather events.
Such productivity losses can also be very damaging to our
economies. By reducing threats to the environment, a more
circular economy can benefit our economies and our society.
In addition to providing society with ecological goods,
we are deeply dependent upon ecosystems for the processes
that they perform. The hydrological cycle delivers clean
water, and photosynthesis in plants delivers the oxygen that
we breathe. These processes are examples of ecosystem
services. The ability of these natural systems to deliver such
services are also threatened by our linear economy. Our
oceans, rivers and landscapes, and their productive systems,
are being clogged and poisoned by our wastes. Apart from
taking away beautiful landscapes that we enjoy – in itself a
service to society – such situations also reduce the ability of
natural systems to deliver ecosystem services.
As an example, when a natural environment – producing
clean water flowing in clean rivers – is polluted, then farms,
towns and industry no longer have access to “clean” water
for “free”. There will probably still be water, but it must
be must be subjected to more cleaning processes before it
is suitable for use, a process that generally requires large
investments in infrastructure. The process of purification then
consumes energy, time and money. Further, other goods or
services that the river provided such as fish, tourism, etc. may
be lost. Such impacts constitute real costs and damage to a
society and its economy.
Examples of ecosystem services:
• decomposition of wastes;
• generation of soil and vegetation;
• pollination of crops;
• seed dispersal;
• recharge of groundwater systems;
• greenhouse gas mitigation.
Taking too much from the environment, and releasing too
much contaminated material back into it, threatens our very
survival.
Creating a circular society
Broad social change, new ways of thinking, and lots of
technological innovation are needed to make the circular
economy work. These things can also support and stimulate
modern society. Likewise, new social norms and aspirations
must emerge to support reduced consumption, speed up the
shift of products-to-services, stimulate the sharing of goods,
and lengthen product lifetimes.
In supporting the circular economy, these social shifts
will also demand that we invent, innovate, develop new
technologies, and create new businesses.
circular societies | Circular Economy 70
The circular economy requires stimulation of society’s
research and development, and of the materials extraction
and production industries. It demands the creation of new
sectors to recover and process materials in circular ways,
and it requires design innovation and the creation of new
business models to operate everything that will make the
circular economy function.
Nor can we lose sight of the fact that new policy
processes must be put in place to support the emergence
of the circular economy. Such work includes the design
and negotiation of new policies and regulations to enable
circularity. As well as supporting circularity, these policy
frames must also impede value destruction and pollution
in the first place. New institutional frameworks must be
designed and implemented to support systems that share
or remanufacture products.
There is also a general consensus among policy-makers
and practitioners in the circular economy, that the creation
of new systems to regulate both the linear economy and the
emerging circular economy will create skills and knowledge
that are vital to meet other global challenges, such as climate
change adaptation. That is, the skills and knowledge that we
build as we seek a more resource efficient circular economy
are also directly applicable when seeking to work with a
range of other sustainability challenges.
But we need to evolve more than just new processes
and technologies. We must pursue new social norms and
forms of engagement; and we need new social systems and
institutions.
If we are truly serious about achieving a circular society
then we must develop ourselves!
5.2 ENVIRONMENTAL IMPACTS OF CONSUMPTION
• Due to today’s immense global supply chains, con-
sumption in one part of the world can now trigger
resource use and emissions in another part of the
world much more than it did just a few decades ago.
• A national environmental footprint can be expressed
by calculating the environmental impact from all
goods and services produced within a country, minus
the environmental impact from the production of ex-
ported products, plus the environmental impact from
the production of imported products.
• In contrast to the environmental footprint, the
ecological footprint is expressed by converting all
environmental pressures to the global hectare, a
unit that expresses the theoretical amount of land
needed to absorb the exerted environmental pressure
(e.g. to regrow resources, or to absorb CO 2 emissions).
While easier to communicate, the ecological footprint
concept is commonly criticized within the scientific
community.
Our environmental footprint
Our demand for goods and services drives the extraction of
resources across the globe. The production and transport of
these goods cause the emission of greenhouse gases and
other substances into our air, water and soil.
71 Circular Economy | circular societies

Our consumption patterns have become more and National emissions accounting
more globalized. Only decades ago, products were mostly
produced in the same country where they were consumed,
and they were made from materials and parts that were
locally available. But today, in our global economy, products
are made from materials from all over the world; supply Consumption
chains have evolved into a complex and interconnected
world-wide network of resource and money flows. For
example, meat produced in Europe may be fed with soy Imports Production
produced in Brazil, and mobile phones sold in the US are
very likely to be assembled in Asia using metals derived from
ores mined in Africa and South America. Domestic

Because of these global supply chains, consumption in

one part of the world now can trigger resource use and
emissions in another part of the world much more than it
did just a few decades ago. Take the example of a US-brand
car sold in France: the emissions related to the burning of
gasoline occur in France. However, the environmental impact
of the extraction and refining of the gasoline was probably
generated in the Middle East, and the impact of the car’s
assembly was generated in the US, while the impact of
the extraction of the metals in the car’s components was
probably generated in South America, or Asia – depending
on the material. All of these factors contribute to that which
we call our consumption related footprint.
The notion of an environmental footprint allows us to
estimate the environmental impact that our consumption
habits exert on the natural environment. The footprint
concept considers the environmental pressures that are
associated with all the goods and services that are consumed
by a person or a region. Like life cycle assessment, it takes
the full life cycle of these goods and services into account,
including the emissions generated along the world-wide
value chain for resource extraction, production, transport and
use. In this way, environmental emissions generated abroad
are also taken into account.
Expressed in a formula, the environmental footprint is the
environmental impact from all goods and services produced
within a country (often called the territorial flow), minus
the environmental impact from the production of exported
products, plus the environmental impact from the production
of imported products. Thorough knowledge of global value
chains is needed in order to calculate the environmental
footprint of a product, and by extension the consumption of
a whole country (Fig. 5.1).
The most commonly used footprint in communication
and policy-making is the carbon footprint. It expresses the
amount of greenhouse gas emissions estimated to be emitted
as a result of resource extraction, production, transport and
use of all goods and services consumed. A carbon footprint
can be calculated for specific goods or individual persons,
but it’s mostly used to estimate the impact of an average
consumption pattern in a region or a country, and it’s
typically expressed in tonnes of CO 2 -equivalents (CO 2 -eq)
per inhabitant. By taking a closer look at which goods and
services are responsible for the largest contribution to the
overall footprint, we gain insight in the way our consumption
Exports
Figure 5.1. National emissions accounting for calculating the
environmental footprint.[33]
habits affect the environment and which habits we should
change in order to reduce our environmental impact.
Carbon is not the only measure used however, and
environmental footprints are estimated for various
environmental concerns. Well established footprint measures,
including carbon, are summarised below.
• Carbon – presents the amount of embodied carbon
dioxide and greenhouse gas emissions as a result of the
consumption (and hence, the production) of goods and
services, expressed in tonnes of CO2 -eq (hence, this includes
non-CO2 greenhouse gases, such as methane).
• Water – expresses the volume of freshwater consumed
(or polluted) as a result of the consumption of goods and
services, expressed in cubic metres of water. Distinction can
be made between volumes of rainwater consumed (green
water, e.g. by rain-fed agriculture or forests), surface and
groundwater consumed (blue water, e.g. industrial process
water or irrigation water) and volumes of water polluted
(grey water, estimated as the amount of water needed for
adequate assimilation of the pollutants).
• Land – tallies the amount of land use (cropland, pasture
and forest) needed to produce the amount of final
consumption, expressed in km².
• Material – calculates the consumption of raw materials
(metal ores, fossil fuels, biomass, minerals) of final
consumption, expressed in tonnes. Material footprints can
be made on an aggregated level, or for individual materials.
In contrast with the footprints presented above, the concept
of the ecological footprint was developed in the early 90s as
an aggregated measure of the extent to which humanity used
(or exceeded) the Earth’s carrying capacity. In the ecological
footprint, all environmental pressures are converted to the
global hectare, a unit that expresses the theoretical amount

of land needed to absorb the exerted environmental pressure
(e.g. to regrow resources, or to absorb CO2 emissions). Based
on the ecological footprint concept, it was estimated that
humanity used 1,5 times the carrying capacity of the Earth
in 2010 (WWF, 2014). The ecological footprint is widely used
in popular literature on sustainable consumption – in general
it is found that the statement that “we currently need 1,5
Earths to sustain our global consumption” is a concept that
is both attention-catching and relatively easy to grasp. Hence
it helps communicate the seriousness of environmental
concerns to broad audiences. This said, the concept is
commonly criticized within the scientific community, not
least because the methodology applied to calculate the
ecological footprint very likely significantly underestimates
the environmental impact of consumption. Further, it
only encompasses available land area, while disregarding
other very serious issues such as land degradation due to
unsustainable land-use practices.
Case Study: The environmental footprint of Flanders
Carbon footprints are the most common footprints discussed
in literature and used in policy making. The carbon footprint
of a country or region is the total amount of greenhouse
gases produced worldwide as a result of the consumption
of its inhabitants.
As an example of how carbon footprints are applied for
a country, it is useful to examine the carbon footprint of
Flanders, a densely populated and highly industrialized region
in Western Europe.
In 2010, the carbon footprint of Flanders amounted to
about 20 tonnes per inhabitant. To limit the average global
temperature rise to 2°C, global greenhouse gas emissions need
carbon footprint – general consumption (tonnes CO 2 -eq/capita)
25
20
15
other
10 goods and
personal transport
services pur-
chased by
5 households food
0 housing
carbon footprint – Housing
(tonnes CO 2 -eq/capita)
100%
80%
other
60%
buildning and
renovation of homes
40%
Energy use – production
of energy carriers
20%
energy use – chimney
0% emissions
Figure 5.2. Carbon footprint for the region of Flanders, divided by consumption type.[34]
circular societies | Circular Economy 72
to be reduced to an average of 2 tonnes per capita by 2050.
The Flemish carbon footprint is therefore ten times higher than
the nominal target. Important in the context of this discussion
is that much of this footprint is linked to consumption.
Nearly three quarters of the Flemish carbon footprint,
about 15 tonnes CO 2 -eq per inhabitant, are linked to goods
and services purchased by households. The majority of these
greenhouse gas emissions, roughly 80%, result from the
production, transport and use of goods and services linked
to housing, food, and personal transport. In addition to
the emissions related to direct consumption of households,
roughly 5 tonnes CO 2 -eq per inhabitant can be linked to
investments by businesses and governments in buildings
and infrastructure, machinery, ICT equipment, etc. (slightly
over 3 tonnes CO 2 -eq per inhabitant) and emissions linked
to public services that are not directly paid for by consumers,
such as education and defense (about 2 tonnes CO 2 -eq per
inhabitant) (Fig. 5.2).
When we dive deeper into the part of the footprint that is
related to housing, we discover that energy use within homes
is responsible for almost 80% of the carbon contribution.
Most of the energy use is related to heating. Slightly over half
of these emissions are generated during the production and
distribution of heating fuel, natural gas and electricity, while
the other half is caused during fuel combustion within the
home itself. Based on this analysis, we can see that from an
environmental point of view, reducing energy use in homes
is an important part of reducing the carbon footprint of
households.
When considering the global distribution of Flemish
consumption emissions, over two-thirds of the carbon
emissions originate from outside the region of Flanders.
carbon footprint – Personal transport (tonnes CO 2 -eq/capita)
100%
80%
60%
other
40% car production,
maintenance and repair
20%
car use – fuel production
0% car use – exhaust emissions
carbon footprint – Food (tonnes CO 2 -eq/capita)
100%
80%
eating out (catering)
60% other foods and
beverages
40%
vegetables and fruit
20% bread and cereals
0% meat, dairy and fish
73 Circular Economy | circular societies

Further, a large share of this is generated outside Europe in footprint of modern middle-class lifestyles has steadily
regions where environmental standards are less strict. This been increasing over the last century. And with business
“export” of carbon emissions explains partly why Flanders’ as usual, footprints are expected to increase even further
carbon footprint increased between 2003 and 2010, while during the coming decades: the size of the global middle-
the carbon emissions within Flanders decreased slightly. class will increase from slightly under 2 billion in 2009 to
almost 5 billion by 2030.
Material footprint Analysis shows that in order to reduce our footprint,
Metals are essential for society and the economy. The material shifting to a more vegetable based diet, reducing waste
footprint for metals for Flanders was calculated in 2007. and saving energy at home and in transport are the most
When considering metal use across the whole production important actions we can undertake. Buying more local
value chain, about 10 million tonnes (10 Mt) of primary metal products also reduces environmental pressures abroad. The
ore was needed in order to fulfil the consumption demand circular economy provides a way of using resources more
in Flanders. The metal demand mainly consists of iron ore efficiently. By using products longer, buying second-hand or
(3Mt), non-ferrous metal ores (5.7Mt), precious metal ores recycled products, opting for dematerialized “services” rather
(0.97Mt) and special metal ores (0.275Mt). While steel is an than primary-material-based goods and by sharing products
important base material for a diverse range of applications, with more people, fewer new products need to be produced,
non-ferrous metals are essential for many sectors, such as resulting in a lower need for primary resource extraction
electronics, renewable energy, energy efficient products, activities such as mining. As such, circular economy strategies
medical appliances, automotive, chemicals, etc. have the potential to contribute to a more efficient resource
The per capita consumption of primary non-ferrous use and a reduction of primary resource needs. But, it is
metals and their ores is illustrated in the material footprint important to remember that it is not just a matter of making
in Figure 5.3. our consumption patterns more circular; we also need to
think about the overall level of our resource use.
Sustainable consumption and circular economy A vibrant social debate is going on about what level
Our current resource use is unsustainable; we are of consumption is needed for a good life and how much
consuming and extracting more raw materials than our material, water, carbon, and land can be regarded as a “fair
planet can provide in the long term. The environmental share” for each person on Earth, within the sustainability
limits of our planet. For many regions of the world, especially
Ores mined in one year to support the average consumption in Europe and the US, this will require a significant reduction
of one person
in footprint per capita and thus profound behavioural
29 AMOUNT 82 LEAD ORE changes. In modern society, such behavioural changes are
Cu OF METALS
EXTRACTED
7,4 KG Pb 24 KG 2,9 KG often difficult to achieve in reality, as the ownership of
Copper Lead
(0,12 KG METAL
/ KG ORE) material goods is deeply ingrained in our psychological and
COPPER ORE
716 KG social identity. In fact, we tend to use goods as extensions
28 NICKEL ORE
(0,014 KG METAL / KG ORE) Ni 36 KG 0,7 KG of our own self, reflecting our social status and who we are.
Nickel
(0,0018 KG METAL / KG ORE) As a result, in order to make our consumption behaviour
more sustainable, it’s vital to address the social logic of
50 TIN ORE
Sn 36 KG 0,1 KG consumption as well.
Tin
(0,0024 KG METAL / KG ORE)

50 BAUXITE How can one define sustainable consumption?

Al 45 KG 8,6 KG Sustainable consumption means that the environmental
Aluminium
(0,19 KG
METAL / KG ORE) footprint of consumption stays within the carrying capacity
of the planet (the planetary boundaries), at global scale,
30 ZINC ORE 5 KG
Zn 60 KG and for some impacts at regional or local scale as well (e.g.
Zinc
(0,083 KG METAL / KG ORE) water depletion). Unfortunately, the estimated maximum
sustainable levels are difficult to estimate, highly uncertain,
44 45 0,02 KG ambiguous and subjective. In 2014, a study estimated
Ru Rh
Rutenium Rodium
the global footprints and then compared them with their
76 77 46
Os Ir Pd suggested maximum sustainable levels (Fig. 5.4, next page).[5]
Osmium Iridium Palladium
The inner green coloured circle represents the maximum
47 78 79
sustainable footprint, while the red wedges represent
Ag Pt Au
Silver Platina Gold estimates of the current global level of each footprint.
ORES OF PRECIOUS METALS From the figure it can be seen that the ecological footprint
157 KG (expressed in global hectares) exceeds the estimated
(0,00011 KG METAL / KG ORE)
maximum sustainable level by about 50%, while the carbon
Figure 5.3. Material footprint of Flemish consumption, footprint (expressed in CO 2 -eq/year) exceeds its estimated
focused on non-ferrous metals.[6] maximum sustainable level by more than a factor of 2.
 circular societies | Circular Economy 74

Carbon footprint
Sustainable consumption and well-being 46–55 vs. 18–25
The ultimate goal of society is to increase the well- Gt CO 2 eq./year

being of its citizens. However, the question is Ecological footprint

18.2 vs. 12 billion
whether a higher consumption pattern always leads global hectares
to a higher well-being. As shown in Figure 5.5,
Maximus
well-being (expressed by the human development sustainable
footprint
index of a country) levels off at a certain level of
resource use (expressed by the material footprint
of the country). This demonstrates that from ?
Green water
a certain high level of well-being, additional footprint
6700 billion
resource consumption no longer improves the
m3/year
level of well-being.
Material footprint ?
Also, well-being encompasses much more than 70 Gt/year (10.5 t/cap)
Blue water
material concerns. As stated by Tim Jackson in the vs. 8 t/cap
footprint
preface to his 2009 book Prosperity Without Growth.[35] 1000–1700 vs.
1100–4500
Grey water
billion m3/year
footprint
“It resides in the quality of our lives and in the health 1400 billion
m3/year
and happiness of our families. It is present in the
strength of our relationships and our trust in the
community. It is evidenced by our satisfaction at work Figure 5.4. 2008 global footprints vs. the maximum sustaina-
and our sense of shared meaning and purpose. It ble footprint.[36]

hangs on our potential to participate fully in the life

of society. Prosperity consists in our ability to flourish
as human beings within the ecological limits of our
1.00 70
Human Development Index

Happy Life Years

planet. The challenge for our society is to create the
Australia
conditions under which this is possible. It is the most
Ireland
urgent task of our times.” Luxem-
0.95 bourg 60
Finland
5.3 THE GLOBAL VIEW
Czech
republic Cyprus
0.90 Malta Portugal
• Raw materials can have massive implications on a Poland 55
Estonia
global scale, both for trade and for international Hungary
Slovakia
diplomacy. Lithuania
Latvia
Mexico
0.85
• There are a number of very problematic issues related
Bulgaria
to the mining, processing and later recycling of such Romania
50
materials in some countries with cheaper, but less Russia
Brasil
developed, social systems. Turkey
0.80
Netherlands
• We must help develop raw materials production Spain
and recycling systems in less developed countries Canada 45
China Sweden Norway
to become safe and beneficial. Equally important, France
Switzer-
however, is to work with countries that already can 0.75 land
Japan
and do conduct operations responsibly. Indonesia Denmark
Italy
Austria 40
South Belgium
Korea Greece
0.70
United
Mining elsewhere and sending our wastes away Kingdom
South Africa Slovenia
Germany
Today’s material and product flows are truly global. Materials United
States 35
that make up complex products might be sourced from
0.65
Africa, then shipped to Asia to be made into parts, and then
moved on to Europe for assembly. As a single product can
contain materials from all corners of the world, this means India
30
that products such as computers and phones are associated 0.60

with environmental and social impacts – both good and bad

– across the globe. With inputs from so many places, it can
become very difficult to know where the materials we use 0.55
0 10 20 30 40 50 60 70
in products come from, or how they were produced. And [t/cap]
Material footprint
similarly, it is also very difficult to know where our products
end up when we discard them. If we, as individuals and as Figure 5.5 Human development index (HDI) as a measure of
societies, are concerned about sustainability, this means that well-being versus the material footprint of consumption.[37]
75 Circular Economy | circular societies
we have to think more carefully about where we source our
materials, and where we send our wastes.
Raw materials can have massive implications on a global
scale, both for trade and for international diplomacy. For
some particularly important materials, a few countries
dominate the global supply. China for example, supplies the
majority of rare earth elements (a set of seventeen chemical
elements in the periodic table critical to many technological
industries), magnesium, tungsten, antimony, gallium and
germanium. Metals such as cobalt and tantalum are mostly
sourced from the Democratic Republic of Congo and Nigeria.
And other countries like Russia, South Africa and the US
supply the majority of materials such as niobium, beryllium,
and the platinum group metals.
Many of these materials are vital for a sustainable future,
as they are used in products such as wind turbines, solar
cells, communication devices, batteries and electric vehicles.
Supply situations where the sources of key materials are
concentrated in a limited number of sourcing locations can
be risky for companies and economies – if demand or supply
changes quickly, then shortages or major price fluctuations
can arise. Such risks become higher when the social, political
or economic situations in source countries lack stability.
Further, there are also some countries that have used their
market dominance in ways that are damaging to other
economies.
Such risks are made worse by our low recovery and
recycling rates. We may depend on these materials, but
instead of seeking to recover, reuse and recycle, often we
discard large proportions in our wastes!
More circularity in our economies can help build resilience
against supply restrictions. But that is not the whole story.
We need to ensure that both the start and the end of raw
material life cycles do not poison the environment or threaten
society. However, this is exactly what is happening right now
in a number of places that supply large proportions of critical
materials to global markets. Serious environmental and
health issues are also being caused in a number of countries
that receive waste products that contain such materials – that
have been sent there by other countries.
Rare earth elements and critical metals from
countries with weak governance
There are a number of situations where global markets are
dependent upon only one or two countries for the dominant
proportion of supply for critical materials. Yet, we see a
number of very problematic issues related to the mining
and processing of such materials in some of the most
important source countries. For example there has been
significant international media attention for many years that
has focused on human rights abuses, inhumane working
conditions, and environmental degradation related to
mining of metals in the Democratic Republic of Congo.
There has also been similar attention given to catastrophic
environmental degradation and human health impacts
related to the extraction of rare earth elements in China’s
Inner Mongolia Autonomous Region.
Generally speaking, the underlying reasons are inadequate
environmental regulation or enforcement of regulation,
unsafe working conditions, or limited levels of technical
development. Or indeed – all of these factors. In such
governance contexts, the result can be that many operations
will extract and process materials in ways that produce
dangerous levels of pollution.
This all too often results in catastrophic damage from
effluents, emissions, and residual wastes. These place society
and environment at risk and will affect future generations.
We even see examples where extraction of such materials in
regions with poor governance has helped to finance wars,
atrocities, or oppression.
A key issue in the context of this discussion, is that these
are absolutely not the only places where such vital materials
can be extracted! Many key materials are also present in
countries that have effective regulations for work practices

and environmental protection, and that have advanced and
environmentally safe systems for extraction, processing, and
waste management.
A challenge for us all, however, is that many materials
and products become more expensive when we take on the
costs of good environmental and social practice. Avoiding
the costs for clean and safe processes, waste management,
and decent working conditions is one way to make materials
cheaper, and hard to compete with. This is one part of why
we see suppliers of cheap critical materials dominating world
markets. However, the problems (and costs) have likely been
shifted to the environment, to host communities, and to
future generations.
If we are going to extract materials in a responsible
manner, then we need to find ways to make sure that
regulations are strengthened in all countries where we source
materials, or we need to ensure that we only source materials
from countries that have effective systems to protect society
and the environment.
But sometimes achieving mining and mineral processing
in countries with the more sustainable conditions described
above is difficult. A contributing factor to this situation, is that
stakeholders – particularly in wealthy developed countries –
sometimes strongly oppose the presence of industries that
they perceive as being “dirty”.
As a result, we can end up with the apparently perverse
situation where our societies demand the technologies and
benefits that require special raw materials but our societies
don’t want them produced anywhere near home! Under
such conditions, maintaining a strong and responsible raw
materials sector can be difficult.
Process end of life products containing hazardous
materials at home, or away?
Many of the products that we discard at the end of their
useful life contain valuable rare earth elements and other
critical raw materials. A particularly important product
circular societies | Circular Economy 76
category is Waste Electrical and Electronic Equipment (WEEE),
also called e-waste. Apart from potentially valuable materials,
they can include hazardous substances like mercury, lead,
cadmium and beryllium.
There are many good reasons to establish a good
collection system for electronic waste, and to ensure that
both valuable and hazardous materials, are captured and
taken care of in the subsequent reuse and recycling process.
In fact, many industrialized countries have developed systems
to ensure that waste electronics are collected and recycled in
an environmentally friendly manner.
We also have international rules to restrict the trade of
hazardous waste. The most notable is the Basel Convention, on
the Control of Transboundary Movements of Hazardous Wastes
and their Disposal (http://www.basel.int/). This global treaty
came into force in 1992 and Basel mandates that hazardous
waste should be taken care of as close to its origin as possible,
and that when a country wishes to export hazardous waste,
that country must obtain a written consent from the importing
country. There are also regional conventions that go a step
further and prohibit the exporting of hazardous waste from
developed countries to developing countries.
But despite the existence of these national and international
policy measures, electronic waste still flows to countries that
lack good systems for recycling. The two main reasons for this
is economic interests of actors and inadequate enforcement
in both importing and exporting countries.
What makes the situation even more complex is that most
of the electronic products are legally exported to developing
countries as second-hand products. While the reuse of
products is preferable in many ways, the problem is poor
treatment of non-reusable parts and products in receiver
countries.
When these products cannot be reused anymore and are
finally discarded, many of these countries don’t have the
infrastructure and technical systems to take care of them in
an environmentally responsible manner. And the recovery
77 Circular Economy | circular societies
of the valuable resources is inefficient. This has resulted in
serious environmental, health and social problems.
Taking responsibility for consumption of materials
Our common future requires large amounts of materials to
build the infrastructure for equitable and clean development.
But much of the pollution and damage that is caused by
today’s supply chains is a result of sourcing materials from
unsustainable production systems – and then sending waste
products that contain the materials away at their end of life.
Society needs more knowledge of the role of circularity
in reducing resource dependencies, securing supply, and
protecting communities. Sending our waste away to where it
likely causes problems does not achieve this. In fact it causes
multiple problems: human and animal health are put at risk,
the environment is threatened, and significant proportions
of valuable materials that could have been recovered are not.
This last item in turn results in a situation that additional
materials must be extracted to make up for those lost.
There is also a need for a range of societal actors to
demand that all key materials are sourced from countries
that have effective systems to protect their societies and
the environment. Some of the stakeholders that need to be
involved are companies working with their supply chains,
policymakers and concerned consumers. We may have to
reconsider our role as consumers and citizens as part of a
society that demands new ways of production.
But it is clear that there are no simple solutions – for
one thing, it seems these approaches may not result in raw
materials that are the cheapest in the short term.
A key part of a sustainable solution must be to help
develop systems in less developed countries, so that both
their raw materials production systems and their recycling
systems become safe and beneficial. However, a second and
equally important part of a sustainable solution is to source
from countries that already can and do conduct operations
responsibly. The same can be said for the recovery of materials
from end of life products. And this part of the solution very
likely requires that wealthy industrialized countries – and their
citizens – host more of these industries than they do today.
5.4 WHO OWNS IT?
• Remanufacturing can extend the lifetime of a product,
but there are challenges involved.
• The challenges have to do with responsibility for the
“new” product, liability, intellectual property rights,
patents and trademarks, and market share.
• Our existing legal and market systems regarding these
issues will have to evolve in order to facilitate a circular
economy
Responsibility for a manufactured product
Remanufacturing can extend the lifetime of a product, but
there are challenges involved; for example, when a third
party remanufactures a product, who made the product?
The original equipment manufacturer certainly designed the
product, made the parts and assembled it together, but
the third party company remanufactured it again. We see
controversy in this area with hard drives that are extracted
from used computers and put through a factory process
that takes the hard drive apart, replaces worn or failed
parts, reassembles and tests it, puts it in a box and sells it
for new with warranty. The tensions between third party
remanufacturers and original equipment manufacturers
manifest in a variety of forms, described in the following
paragraphs.
Liability – When this remanufacturing process is undertaken
the product can be upgraded to improve performance.
In that case who is liable for the product if it fails? Is the
warranty of the original equipment manufacturer still valid?
Might this situation have the potential to damage the brand
name of the original equipment manufacturer? The original
equipment manufacturer may not be responsible for the
quality of the remanufactured product so it may have issues
with the use of trademarks and brand name. This in turn
leaves uncertainty about which logos can still be used on the
product and packaging.
Intellectual Property Rights – Another challenge is that of
intellectual property rights. This could be a barrier to the
third party who needs information about the product or
special tools in order to remanufacture
Market share – In some cases the third party develops a
market that can be beneficial to the original equipment
manufacturer, like opening up a new region. But in other
cases the original equipment manufacturer sees the third
party as stealing market share – what if people opt to buy the
remanufactured products instead of new products?
Trademarks – As described in the paragraph about liability,
the quality of the product can change after remanufacturing
and there may be uncertainty about how brand logos and
trademarks should be applied. It is generally advised that
the remanufacturer places their trademark on the product
itself and not only the packaging, so that it is clear that the
product of the original equipment manufacturer has been
remanufactured.
Patent infringement – In some countries, if a product is
remanufactured, the original equipment manufacturer
may have grounds for patent infringement. Therefore
the remanufacturer is advised to check if a product is
under patent protection. If a remanufactured product is
defective the remanufacturer can face claims, therefore
the remanufacturer is responsible for the product and for
providing documents and support.
In the worst cases, these tensions can lead to legal
disputes. But there is a better, circular, way forward. This
can be pursued by setting up networks and alliances
between original equipment manufacturers and third party
remanufacturers. This can lead to business partnerships to
the benefit of everyone in our circular economy.
 circular societies | Circular Economy 78

Product user communities for repair

There can be tensions between original equipment
manufacturers and product users when they repair and
upgrade their own purchased products. To have more
access to the knowledge and specialist tools they need,
many users join online communities, and friction between
these communities and original equipment manufacturers
can develop. There are many such communities all over the
world.
One example is the Story of Stuff, (www.storyofstuff.org)
a worldwide movement about sharing information with the
aim to reduce the number of products. It focuses on slowing
consumption by sharing and serving the community. The
movement also raises awareness about harmful products.
A second is Hackerspace (www.hackerspaces.org). This
group set up creative spaces to co-create. It is a repairing
community, and has its own philosophy on society and
products. The Hacker Ethic is focused on freedom and open
access of information. They embrace the concept of learning
by doing and peer-to-peer learning. 5.5 THE LOCAL VIEW
A third is Fablabs (www.fablabs.io). This community
focuses on empowerment through new technologies at the • Our lifestyles need to shift in support of sharing or
grassroots level and has a focus on the local community. repairing products, rather than each of us owning
Fablab is short for Fabrication Laboratory, and they are products we rarely use.

small-scale workshops offering digital fabrication, such as
3D printing.
Organizations such as IFIXIT (www.ifixit.com) provide
support in the form of tools and knowledge, and support
all communities in their repair activities.
We see an emerging and evolving topic in the tensions
between people and companies. In a linear economy the
situation is clearer, but the emergence of the circular
economy is throwing up new challenges and tensions that
we will need to resolve as we transition.
• Sharing is built around access-based consumption; we
pay for access to the function, not necessarily owner-
ship. Many resource intensive products, such as vehi-
cles or washing machines, stand idle for most hours
of the day, when multiple people could otherwise be
accessing them.
• We need to make stronger efforts to repair or upcycle
things that are broken, rather than replace them. In
part, this relies on products being designed for easier
repair.
79 Circular Economy | circular societies
The circularity principle has been applied at many different
levels. It’s important to remember that circularity (closing
resource loops) and resource efficiency (narrowing resource
loops) need to go hand in hand if we are to bring our
consumption within global limits. This requires deep social
shifts, such as re-organization of individual lifestyles by
people joining, sharing and repairing communities. In this
way, collaborative consumption and production are fast
entering our everyday lives. Examining a number of the
underlying issues associated with our consumption patterns
can cast light on why this is so.
Sharing
Many goods stay idle for most of their lifetime. For example,
the average European car is used for only 29 minutes per
day. This means that over an average 12-year lifetime the
car is used in total for only three months. Households own
an increasing number of products and equipment, much of
which is rarely used. In the UK and the US the items that
people use less than once a month amount to 80% of all
the items owned, and 30% of clothes bought by British
households are never worn. Other developed countries show
similar trends.
So if we know that many goods are already out there,
and they have a large idling capacity, why do we need to
produce more? Why not improve or optimize the use of
goods that have already been produced instead? The whole
idea of sharing is built around access-based consumption
and functional thinking. Instead of viewing a product as a
consumable, we can instead consider the function or value
the product can deliver, and if we can get the same value by
accessing the product instead of owning it.
This is nothing new! Libraries full of books for example,
have existed for a very long time – in such a case, a central
actor (the library) mediates the shared use of books. During
a book’s library lifetime it may be read by many individuals.
What is now different is that we see more examples of sharing
between strangers utilising new forms of mediation. Such new
freezers washing machines
100 %
95 %
90 %
85 %
80 %
75 %
70 %
65 %
60 %
55 %
1990
1991
1992
1993
1994
1995
1996
1997
Figure 5.6. Evolution of specific energy consumption of large appliances (the base is 100% in 1990).[38]
methods of sharing is generally mediated by digital technology
and occurs in a variety of consumption domains including
fashion, mobility and accommodation. Some examples of
these are “swap shops” for clothes and accessories, car
sharing organizations like Drivy (Now owned by Getaround:
www.getaround.com) and Uber (www.uber.com), and home
sharing platforms like BeWelcome (www.bewelcome.org)
and AirBnB (www.airbnb.com).
Sharing’s contribution to a circular society
Let’s look at an example of how accessing goods instead of
owning them can contribute to a reduced environmental
impact from our consumption. In the European Union over
the last two decades, the average specific electricity
consumption of all large appliances (except TV-sets) has been
decreasing steadily since 1990. This is because appliances
that are more energy efficient are now offered on the market.
Energy efficiency improvements have reached almost 40%
for washing machines and dishwashers, and around 30% for
freezers, refrigerators and dryers. (For TV-sets, the increase
in energy consumption is due to the diffusion of larger TV-
sets). Large appliances are on average 25% more efficient
than in 1990, with countries like Germany, Sweden and the
Netherlands registering very strong progress (Fig. 5.6).
At the same time, almost all energy efficiency gains have
been offset by an increase in the equipment ownership (Fig.
5.7). In other words, even though people own appliances
with higher energy efficiency, they also own more
appliances overall. As a result, the electricity consumption
per household of large appliances was only slightly lower
in 2009 than 1997.
Environmental impacts occur not only in the production
and the use phases of these appliances but also in their
end-of-life, when the old appliances need to be recycled
or disposed of. In addition, some appliances like washing
machines and dryers often have considerable idling time
– for example, standing idle for a week or so, waiting for
a new batch of laundry to be loaded. We also see some
refrigerators dishwashers TV dryers
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

1,5%
1.0%
0.5%
0.0%
%/year
-0.5%
-1.0%
-1.5%
-2.0%
1990–2009
Figure 5.7. Decomposition of change in the use of large appliances.[38]
households owning an extra freezer, where people store
frozen fruits and berries, pre-cooked food for parties etc.
The net throughput, and thus effective use in this scenario is
low, and thus equivalent to idling (Fig. 5.7).
If we owned fewer appliances instead, and could ensure
that people get access to them when they need them, we
could optimize the idling capacity of these appliances so
that they are used more frequently. In addition, we could
choose appliances of higher quality and efficiency, and the
ones that have a longer lifetime. Having fewer, more efficient
and more durable appliances would help keep production
at lower levels. Such actions would save resources, and
reduce environmental pollution and waste generation in
the production phase. Since fewer appliances would be
in use, this would also reduce the need for the end-of-life
waste management and would decrease the associated
environmental impacts. Overall, sharing appliances could
help us contribute to a more circular society.
Sharing, sharing economy, the peer to peer economy and
collaborative consumption are just some of the terms used
to describe a variety of bottom-up initiatives, public-private-
people partnerships, business start-ups and local government
schemes, all of which seek to utilize more of the available
idling capacity of our material world. Sharing is seen as one
potential answer to the unsustainable patterns and levels
of production and consumption. It can also be attractive
for individual consumers as they can get easier access to
products that are normally difficult to find or very expensive
to buy, such as higher quality products, luxury goods and
rarely used products.
Repairing
While some goods stay idle, others are thrown away too
soon. Short product life cycles intensify the throughput
of resources in the economy and aggravate environmental
and social impacts. For every bin of waste that a household
produces, many more bins of waste were made upstream.
So even if we could recycle 100% of our household waste,
it does not get us to the core of the problem.
One of the reasons that products are thrown away is
because they physically fail in some way. Often the faults
are minor but users are reluctant to consider repair options
circular societies | Circular Economy 80
Observed variation
Increased equipment ownership
Energy efficiency progress
1997–2009
due the high cost of repair in relation to the low cost of a
new good, or due to a desire to obtain the latest model of
a product instead. Activities such as upcycling and repair
offer valuable alternatives to the wasteful culture that
mostly wealthy societies have created. In addition to being
consumers, individuals can assume an active role in creating
a circular society by repairing and upcycling products, from
upgrading electric and electronic equipment to refurbishing
houses and repairing bikes and cars. Examples of places
where individuals do this collectively include repair cafes and
bicycle kitchens.
Example: how repairing contributes to a circular society
The bicycle kitchen (Cykelköket) (www.cykelkoket.com)
in Malmö, Sweden is a community-based workshop for
servicing and repairing bicycles. Everyone is welcome to join
the bicycle kitchen; registration is not required and there is
no membership fee attached. The workshop does not offer
services where customers can buy bicycles or leave their bikes
for repair. Instead, the users may borrow tools to fix their
own bikes. There are also staff members and volunteers to
ask for advice, if one is unsure how to fix the fault or which
tool to use. The bicycle kitchen also collects donations of old
spare parts to be used by visitors (Fig. 5.8, next page).
How do the activities at an initiative such as a bicycle
kitchen contribute to a circular society? Repairing items such
as bikes, furniture, clothes and other personal belongings
allows us to use them for longer, thus avoiding the purchase
of new items and the production of new goods. This saves
resources and energy, and waste is reduced both related to
the production processes and by avoiding the premature
disposal of still functional items.
The fashion of fixing things is being spurred by digital
technology. Sharing knowledge and skills online is now
easier than ever, through platforms like Youtube, Fixperts
and Instructables. Individuals are actively co-creating new
production-consumption systems with the help of diverse
stakeholders like start-up businesses, municipalities or social
innovation hubs. They reframe their everyday consumption
practices to include serious leisure projects, repair services,
and upcycling strategies. These often have a so-called pro-
social purpose.
81 Circular Economy | circular societies
Figure 5.8. Spare wheels and wrenches for sharing in The Bicycle Kitchen (www.stpln.org/cykelkoket) in Malmo, Sweden.
Sharing and repairing more
Despite the potential of sharing and repairing to foster
circular societal shifts, these activities are still marginal,
and unsustainable lifestyles continue to dominate. To make
sharing and repairing normal and embedded in our everyday
lives, our perceptions need to change. People will also need
to accept that it is perfectly okay to wear someone else’s
clothes or drive someone else’s car, and this can be equally
as fashionable and comfortable as wearing new clothes or
driving your own car. People will also need to accept that it
is quite normal to repair their smartphones, laptops or bikes.
You can do it yourself or, even more fun, with some help
from your neighbours, colleagues, friends or co-citizens.
But how do we go about achieving such a norms shift?
As a starting point, it is generally agreed that there is a need
to better understand the potential contribution of sharing
and repairing to environmental sustainability, economic
prosperity and social cohesion, as well as the socio-economic
and environmental risks that these activities might bring.
A balanced understanding provides proponents of the
circular economy a basis for both action and communication.
From an economic perspective, by participating in sharing
and repairing, individuals can save money since they don’t
have to buy as many new products. They can also earn
money if they rent out their possessions, or help others with
repairs. Since sharing systems are mainly local, they have real
potential to contribute to local community development and
economic growth. However, this is not without controversy,
as uncertainties remain on how the profits should be
distributed, and in what ways these new models affect
established businesses. There is also no universally accepted
practice on how to incorporate profits created from sharing
into the formal tax system, which often places them in a
“grey” legal area. Such areas remain works in progress in
many countries, and resolving such issues is important to the
future progress with the Circular Economy.
From a social perspective, by participating in sharing and
repairing, individuals can build social connections, improve
communal well-being and in this way build social capital.
On the other hand, concerns have been raised about, for
example, public safety, privacy and limited liability of sharing
organizations. Again, such questions need to be resolved.
From an environmental perspective, we need to produce
fewer goods. This would reduce the use of raw materials
and energy, and generate less waste and emissions. But
sharing could also stimulate consumption. If sharing does not
substitute consumption, but rather adds to the consumption
portfolio, there is always the possibility that society might
end up with more consumption, and a higher demand
for production. And there is also a risk that the money
people save through sharing and repairing will be spent on
environmentally detrimental things such as long-distance
journeys or larger dwellings. Active consideration of such
rebound effects is doubtless part of the learning process in
the pursuit of a circular society.
Sharing and repairing activities can also foster circular
societal shifts at individual and community levels. But to
realize this potential, society need to be aware of associated
risks, and find ways to circumvent those while maximising
the benefits of sharing and repairing.
 circular societies | Circular Economy 82

AUTHORS and PRESENTERS CHAPTER 5: CIRCULAR SOCIETIES

5.1 CIRCULARITY’S VALUE TO SOCIETY David Peck – Delft University of Technology, The Netherlands and Karl Vrancken – Sustainable Materials
Management, VITO, Belgium.
5.2 ENVIRONMENTAL IMPACTS OF CONSUMPTION Saskia Manshoven – Sustainable Materials Management, VITO, Belgium.
5.3 THE GLOBAL VIEW Philip Peck and Naoko Tojo – IIIEE, Lund University, Sweden.
5.4 WHO OWNS IT David Peck – Delft University of Technology, The Netherlands.
5.5 THE LOCAL VIEW Yuliya Voytenko Palgan – IIIEE, Lund University, Sweden.
83 Circular Economy | references

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